Gold Price Surge and ETF Performance Disparities
The recent surge in gold prices is drawing attention as it is intricately linked with global economic conditions. In Korea's KRX gold market, gold prices have recorded levels approximately 9.80% higher than international gold rates, leading to a phenomenon referred to as the 'kimchi premium.' This has contributed to domestic gold spot ETFs recording returns ranging from a minimum of 12.07% to a maximum of 27.47%. In contrast, ETFs tracking international gold prices exhibited relatively lower returns.
The backdrop for the gold price increase includes the U.S. federal government shutdown and a weaker dollar, with demand for gold as a safe asset rising. NH-Amundi Asset Management highlighted the attractiveness of investing in gold mining companies, reporting that their gold mining company ETF has surged by 109.22% year-to-date. Leading gold mining firms are reinforcing their stock values through dividends and share buybacks.
However, an imbalance in supply within the domestic KRX gold market remains unresolved. While new supply expansion measures have been discussed, implementation remains limited due to tax-related issues. Amidst these conditions, global investment bank Goldman Sachs has sparked investor optimism by suggesting that gold prices might soar to $5,000, amplifying market interest.
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Even for Gold ETFs, 25% vs 15%...The 'Kimchi Premium' Drew a Line - Financial NewsThe domestic gold price has surged compared to international prices due to the so-called 'Kimchi Premium,' leading to a divergence in the returns of domestic gold-related ETFs. While these products all track international gold prices, they follow prices calculated in the North American and London markets, resulting in slight differences in returns...
Gold Prices Soar with 'Kimchi Premium' Resurgence as ETF Demand Rises but Supply Falters - Yonhap InfomaxRecently, due to a preference for safe assets, demand for gold investment has surged, causing the 'Kimchi Premium' phenomenon to reappear in the Korean Exchange (KRX) gold spot market. Demand is increasing through domestic gold spot exchange-traded funds (ETFs), but there are no adequate supply expansion measures, leading to a growing supply-demand imbalance. According to the Korea Exchange on the 2nd, the price per gram for the 1kg product in the KRX gold market was 191,310 KRW, which is 17,090 KRW (9.80%) higher than the international gold price of 174,220 KRW on the same day. The previous day, the exchange cautioned investors about the price disparity between the KRX gold market and international exchanges.
Gold Prices Surge 47% This Year... ETF Returns Also Increase - DailyanThe price of gold, a representative safe asset, has surged approximately 47% this year, continuing its high-altitude march. As returns on gold-related Exchange-Traded Funds (ETFs) continue to rise, investor interest is increasing. According to the Korea Exchange on the 2nd, there are a total of 9 gold-related ETFs listed in the domestic ETF market (excluding inverse ETFs), and their recent one-month returns range from a minimum of 12.07% to a maximum of 27.47%.