ETF Market Faces Heightened Volatility Amid Geopolitical Instability
Recently, a sharp decline in international gold prices has led domestic gold-related ETFs to post double-digit losses. The primary reasons cited are the strengthening US dollar and rising real interest rates resulting from escalating tensions between the US, Israel, and Iran; notably, the ACE Gold Futures Leverage ETF suffered a significant 27.29% loss. Analysts describe the correction in gold prices as a necessary cooling-off due to overheated conditions, with expectations of a rebound should the conflict subside.
Meanwhile, the KOSPI ended lower, though the KOSDAQ index managed to close slightly higher. ETFs betting against the KOSPI, such as leveraged inverse funds, recorded notable short-term gains as market corrections intensified. However, over the annual horizon, these ETFs still report considerable losses.
In commodities and energy markets, ongoing Middle East risks have fueled increased volatility. Energy, oil, and agricultural commodity ETFs and futures have posted strong performance since the conflict began, with the 'RISE US S&P Oil Producers' and 'KIWOOM US Oil Energy Companies' ETFs up 24.31% and 19.14%, respectively. In contrast, safe-haven assets like gold and silver ETFs have seen their values fall, demonstrating a clear divergence in asset class performance.
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