Korea's Retail Investors Flock Back to Gold Amid Price Rebound

Individual investors in Korea are returning to the gold market after a three-month selling streak, driven by rebounding prices. According to the Korea Exchange (KRX), individuals net bought 133 billion won ($94 million) worth of gold on the KRX Gold Market between August 1 and last Friday.

This turnaround is a stark contrast to the previous trend, where retail investors sold about 524 billion won worth of gold from May through July. However, with prices increasing, individual investors have stepped up their purchases of gold-related exchange-traded funds (ETFs).

The price rebound was driven by cooling U.S. inflation data and renewed expectations for Federal Reserve policy easing, which led to a swift rally in international prices.

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 due to rising crude prices and concerns that the Fed would keep monetary policy tight. The drop was over 25 percent in about five and a half months.

However, gold prices have since rebounded, surging 11.9 percent from last month's low to touch $4,467.50 on August 12, supported by fading expectations that the Fed will raise interest rates at its September meeting.