Gold products on display at the Korea Gold Exchange’s Jongno main branch in Seoul. (Yonhap)
SEOUL, Oct. 20 (Korea Bizwire) — Gold prices are soaring to record levels, propelling gold-related exchange-traded funds (ETFs) in South Korea to an average monthly return of more than 20 percent — even as the domestic stock market hits new highs.
The unusual parallel rise of risky assets such as equities and traditional safe havens like gold reflects what analysts describe as an era of “dual exuberance,” driven by global monetary easing, geopolitical instability, and weakening trust in government debt.
According to financial data provider FnGuide on October 19, seven gold-linked ETFs listed on the Korean market posted an average return of 20.6 percent over the past month.
The top performer was ACE KRX Gold Spot, which surged 29 percent, closely followed by TIGER KRX Gold Spot at 28.9 percent. Other funds, such as SOL International Gold (up 18.0 percent) and KODEX Gold Active (up 17.7 percent), also posted near-double-digit gains.
Despite the sharp rally, individual investors continue to pour money into gold. Between October 13 and 17, ACE KRX Gold Spot ranked third among all ETFs by net individual purchases, with retail investors buying 129 billion won worth of shares. TIGER KRX Gold Spot and KODEX Gold Active also placed in the top ten, indicating persistent retail enthusiasm.
The global spot price of gold, which hovered around $2,000 per ounce in March 2024, broke through $4,300 on October 16, setting an all-time high of $4,318.75.
An employee organizes gold products at the Korea Gold Exchange in Jongno-gu, Seoul. (Yonhap)
A Flight to Safety Amid Uncertainty
Analysts attribute the surge to a confluence of factors — including expectations of rate cuts by major central banks, rekindled U.S.–China trade tensions, and geopolitical instability. In addition, deteriorating fiscal positions in major economies have eroded confidence in sovereign bonds, pushing investors toward gold as an alternative store of value.
“Even though long-term real interest rates remain elevated, demand for non-interest-bearing gold continues to rise,” said Yoon Yeo-sam, a researcher at Meritz Securities. “Institutional investors are turning to gold because ballooning fiscal deficits and sovereign debt have undermined confidence in government bonds. In many ways, gold has replaced bonds as the ultimate safe asset.”
An employee organizes gold products at the Korea Gold Exchange in Jongno-gu, Seoul. (Yonhap)
Analysts See More Upside Ahead
Despite warnings of an overheated market, experts expect gold’s rally to persist through the year’s end. “Once gold enters an uptrend, it tends to sustain its momentum,” said Oh Jae-young, an analyst at KB Securities. “Even if prices appear overheated, continued ETF inflows, central bank purchases, and expectations of additional U.S. Federal Reserve rate cuts in the fourth quarter could keep gold climbing without major corrections.”
Global investment banks such as JPMorgan and Goldman Sachs now predict gold could reach as high as $4,800 per ounce in the coming months — a testament to how far investors’ appetite for safety has grown in an increasingly unstable world.
Kevin Lee (kevinlee@koreabizwire.com)
