Korean Retail Investors Flock Back to Gold Market as Prices Rebound

Retail investors in Korea are once again buying gold after selling for three consecutive months. According to data from the Korea Exchange (KRX), individual investors net bought 133 billion won ($94 million) worth of gold between August 1 and last Friday.

This turnaround contrasts sharply with the trend from May through July, when retail investors offloaded about 524 billion won worth of gold, including 125 billion won in May, 348 billion won in June, and 51 billion won in July. However, individual investors also stepped up their purchases of gold-related exchange-traded funds (ETFs) over the same period.

The buying frenzy is largely driven by a swift rally in international prices after a prolonged decline, fueled by cooling U.S. inflation data and renewed expectations for Federal Reserve policy easing. Gold futures on the New York Mercantile Exchange hit a record closing high of $5,354.80 per ounce on January 29 before falling to $3,992.10 on July 16.

The precious metal then rebounded, surging 11.9 percent from last month's low to touch $4,467.50 on August 12. Analysts point to fading expectations that the Fed will raise interest rates at its September meeting as a key driver of this rally.