Gold ETF Investment Boom and Rising Gold Prices
Amidst increasing global economic uncertainty, gold is gaining attention as a safe asset, leading to significant inflows into gold Exchange Traded Funds (ETFs). Domestic major gold ETFs have seen investments of 43.8 billion KRW, while the leading global gold ETF, 'GLDM', has attracted an astounding 2.5 trillion KRW. This influx is driven by a combination of factors including expected interest rate cuts, inflation, and growing national debts, which have collectively contributed to the rise in gold prices. Consequently, this trend has resulted in an increased preference for gold ETFs, with Goldman Sachs projecting potential gold prices reaching up to $5000 per ounce.
Recently, gold mining ETFs have also achieved high returns. Over the past year, the top 10 domestic gold ETFs have registered returns ranging from 30% to 72%. These ETFs' net assets have reached 2.28 trillion KRW, reflecting a steady upward trend bolstered by rising gold prices, particularly as international gold prices have reached a historical peak at $3600 per troy ounce.
Factors supporting the rise in gold prices include the expected U.S. interest rate cuts, the weakening of the dollar, and the increase in gold purchases by central banks. Especially notable is the rise in gold reserves among central banks in China and other emerging markets, which is a significant factor in the inflows into gold ETFs. As gold demand continues to grow, experts are positive about the prospects of gold prices reaching $5000 per ounce.
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