Surge in ETF Investment Demand Amid Disparity Between Domestic and International Gold Prices
Despite recent declines in gold prices, experts predict potential for further gains by year-end, with the purchasing trends of central banks and anticipated interest rate cuts by the Federal Reserve seen as key drivers for price increases. In the domestic market, the 'Kimchi Premium' phenomenon has led to gold prices surpassing international rates, with the premium narrowing from 11.4% to 8.9% in recent days.
Against this backdrop, Samsung Asset Management raises concerns over the discrepancy and investment risks associated with gold spot ETFs, advocating for a stronger basis in international gold markets. The higher domestic valuation, prompted by the 'Kimchi Premium,' has heightened the need for investor protection.
Demand for ETFs mirroring international prices has grown, with Shinhan Asset Management's SOL Gold ETF attracting 54 billion KRW in investment over the week. This aligns with Shinhan's plans to reduce its ETF fees, making long-term investments more efficient. Overall, domestic investors are shifting funds into international gold ETFs as a hedge against the volatile 'Kimchi Premium.'
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