Caution Advised in Domestic Gold Market and ETF Investments
The domestic gold price has reached all-time highs, surpassing international market prices, prompting a rise in gold ETF investments. However, this excessive rise in domestic gold price is attributed to the 'Kimchi Premium' effect, signaling a need for caution among investors. The Korea Exchange has warned that such price imbalances may pose risks to investors.
On a particular day, the domestic gold market saw the price per kilogram rise up to 4.18% during trading, with a maximum decline of 7.62%, showcasing significant volatility. This is noteworthy as it is the first time since the Korea Exchange gold market opening that such actual volatility has been observed. Meanwhile, Goldman Sachs has projected that the gold price could rise to $5,000 per ounce in the medium to long term, providing a positive outlook for long-term investors.
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