Agricultural Commodities Outperform Gold and Silver in ETF Market Amid Rising Geopolitical Risks
Last month, agricultural commodity ETFs outperformed gold and silver ETFs, buoyed by escalating geopolitical tensions with Iran and surging international oil prices. Major agricultural ETFs tracking corn, soybeans, and wheat showed robust returns, while traditional safe havens like gold and silver suffered lower yields due to the combined effects of a rate freeze and inflation fears, putting downward pressure on their prices. The net assets of gold and silver ETFs dropped nearly 1 trillion KRW within a month, with returns falling by 10.85% and 19.69% respectively. Nonetheless, experts see the recent price corrections in precious metals as a potential buying opportunity for long-term investors.
With ongoing geopolitical issues and inflationary pressures, there is an accelerating 'money move' phenomenon within the gold and silver markets, as investors seek optimal allocations. Notably, silver ETFs have been exhibiting contango—where future prices exceed spot prices—largely driven by industrial demand, which now accounts for 55% of silver's total usage. Interest in physical precious metal investments, such as silver ETFs, silver banking products, and silver bars, is also on the rise. Financial analysts stress the importance of devising strategically efficient, diversified investment plans that take into account both investment objectives and currency fluctuations.
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