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Price of precious metal rises by 10 percent this year alone
By Anna J. Park
The price of gold has been rising amid increased uncertainty hovering over the global financial banking sector. While the global price of the precious metal nears its record high reached during the summer of 2020, its trading price at the Korea Exchange (KRX) gold market hit an all-time high recently.
According to NYMEX, the price of gold stood at $1,958.8 per ounce, a 0.26 percent increase from a day earlier, as of 1:12 a.m. U.S. Eastern Time (EDT) on Tuesday. The price has risen about 10 percent this month, following the unexpected bank run at Silicon Valley Bank (SVB) in mid-March.
This year's price has yet to reach the all-time high of $2,063 recorded on Aug. 6, 2020. But, market watchers see gold prices moving upward, potentially breaking the record, amid murky financial prospects surrounding global banks.
Investor preference for gold has also been strong in Korea. The trading price for one gram of gold at the KRX's gold market topped its all-time high early last week. The price of gold closed at 83,490 won per gram ($64.31) on March 20, the highest-ever closing price on the state-run gold market which was launched on March 24, 2014. The previous record-high price was 82,970 won recorded on July 28, 2020.
Since setting a new record early last week, the trading price of gold in Korea has fluctuated slightly, finishing at 82,400 won on Monday. It is a 10.8 percent jump in less than three months since the price of gold ended at 74,360 won per gram at the end of last year.
With the gold price soaring, local investors are putting their money into gold banking accounts. More than 517 billion won has been deposited at gold banking accounts set up at KB Kookmin, Shinhan and Woori Banks, as of last Friday. It is a more than 10 billion won increase in the total amount of deposits in those accounts, compared to the end of last year.
However, the price of gold is showing signs of stabilizing this week after its four-week surge, as the global repercussions from the sudden collapse of SVB seem to have eased with First Citizens' purchase of SVB's failed assets.
In line with the stabilizing mood, some experts see the global price of gold as unlikely to surpass the record high of $2,063 per ounce set in August 2020, despite its recent bullish moves.
"The global price of gold for 2023 is not expected to easily surpass $2,063 per ounce, which is the historic all-time high. The price was set on Aug. 6, 2020, with a combination of multiple factors, including investor sentiment pivoting towards safer assets due to COVID-19, the weakening of the dollar, the fall of real interest rates and the massive influx into gold exchange-traded funds, among other things, all working together to stoke the gold price," said Kim So-hyun, a commodity strategist at Daishin Securities.
