Trends in Gold and Silver ETFs: Opportunities and Risks
The ACE KRX Gold Spot ETF from Korea Investment Management is growing significantly, surpassing 1 trillion won in net assets due to a strong buying trend from individual investors. However, managing this ETF is challenging as the domestic gold price deviates over 20% from international prices. The emergence of the 'kimchi premium' requires investors to be cautious of price volatility.
Recently, the international gold price has been on a downturn, which similarly dragged down gold ETF prices both locally and globally. The ACE KRX Gold Spot ETF on the Korea Exchange fell by 3.51%, and the SPDR Gold Shares in the U.S. experienced a similar decline. Market experts attribute this decline to profit-taking actions, and they highlight that silver is relatively undervalued, enhancing its investment appeal.
On the contrary, gold prices are nearing historical highs, attracting significant fund flows into domestic gold ETFs, and gold-related ETNs are on the rise. However, gold prices in the KRX market are about 20% higher than international ones, warranting investor caution regarding this price premium. Meanwhile, interest in silver is rising, with the KODEX Silver Futures ETF up 12.52% this year.
Amid economic uncertainty under President Trump, not only gold but also silver and copper prices have been surging. International silver prices have risen 9.07% year-to-date, with copper showing a strong upward trend as well. Silver and copper-related ETFs have recorded significant gains, with experts suggesting that unless the U.S. shifts to a monetary tightening policy, the risk of price declines remains low. Additionally, supply shortages are expected to sustain the price increase in silver and copper.
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