South Korean Gold Investment Loses Steam Amid Weakening Sentiment

Gold investment in South Korea has lost significant momentum after reaching record highs earlier this year. The average daily trading volume of KRX gold spot products fell to 218,708 grams in July, a 51.6% drop from June's 451,831 grams. Average daily trading value also plummeted by 54.4% to 42.66 billion won.

The sharp decline is attributed to weakening investor sentiment rather than falling gold prices. Market analysts point to the continued high interest rates in the U.S., which have reduced gold's appeal, and a shift into growth stocks, particularly semiconductor-related shares. Choi Jin-young of Daishin Securities noted that 'gold prices are often more affected by changes in market liquidity than stocks.'

The KRX gold spot price has also weakened, falling from a yearly high of 269,810 won per gram on January 29 to a yearly low of 185,990 won per gram on July 30. Gold-related exchange-traded funds (ETFs) have seen net outflows, with ACE KRX Gold Spot and TIGER KRX Gold Spot experiencing selling pressure.