Gold price soars to all-time high

The Korea Times

The Korea Times

Finance

Sat, September 23, 2023 | 12:52

Markets

Gold price soars to all-time high

Posted : 2023-04-06 16:05

Updated : 2023-04-07 14:13

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By Yi Whan-woo

The price of gold soared to a record high this week, fueled by a growing preference for safe-haven assets by investors in the face of financial market volatility sparked by the recent global banking turmoil.

A gram of gold was priced at 84,980 won ($64.40) on the Korea Exchange (KRX), Wednesday, up 1.86 percent from the previous session. The price of gold hit an intraday high of 85,020 won. Wednesday's price beat the previous record high of 83,490 won set on March 20.

Market watchers said the surge in gold prices comes after the collapses of Silicon Valley Bank (SVB) in the United States and Credit Suisse in Europe in March, which rattled stock markets around the world.

In the U.S., the price of gold futures hovered around $2,038 per ounce on Wednesday ― just 2.5 percent away from former highs of $2,089.20 reached in August 2020.

Market observers attributed the spike to an expected easing in the U.S. Federal Reserve's monetary policy amid a weaker dollar and a drop in the 10-year treasury yield.

"So far, rising interest rates have been boosting the opportunity cost of possessing gold. The completion of a key rate hike cycle that is soon to come is thus positive news for prices of gold," said Chun Kyu-yeon, an economist at Hana Securities.

She also pointed out that central banks of emerging economies are continuously increasing the purchase of gold since the second quarter of last year. China is also holding record-high amounts of gold since 2019, while Russia and Iran are planning to issue stable coins based on gold to avoid sanctions, she added.

Analysts also point to an intensified rivalry between the U.S. and China and Finland joining NATO as factors that continue to heighten geopolitical risks to pull up gold prices.

yistory@koreatimes.co.kr