Changes and Prospects in the Gold and Silver ETF Markets
Last month, the net assets of domestic gold and silver-related exchange-traded funds (ETFs) exceeded 10 trillion won. This suggests that as safe assets, gold and silver have gained focus among investors. However, the recent sharp decline in gold and silver prices has added volatility to the market. This arises alongside reduced expectations of U.S. monetary policy easing, and suggests that the instability in gold and silver prices will likely persist.
The nomination of Kevin Warsh, a former Federal Reserve governor known as a 'hawkish dove', as the next Federal Reserve Chair has increased volatility in gold and silver. His perceived stance is negatively impacting the pricing of these metals. The price of silver fell by 31.37% last month, and gold also recorded an 11.39% decrease. Such fluctuations originate from diminished market expectations for large-scale liquidity support.
In the medium to long term, gold and silver are still regarded as safe assets, and their popularity is likely to persist. This is driven by the depreciation of currency values, and there is also the potential for the commodity cycle to shift towards non-ferrous metals, depending on changes in the market's liquidity environment.
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