Gold Prices Hit 6-Month Low, Yet Still Near 900,000 Won per 'Don'

Domestic gold prices have fallen below 200,000 won per gram for the first time in six months.

According to the Korea Exchange, the price dropped to as low as 196,780 won per gram during intraday trading on the 11th, before fluctuating throughout the day.

The market closed at 200,030 won per gram, down 2.61% from the previous trading session.

This marks the first time in six months since December 11 of last year that the domestic gold price has dipped to the 200,000 won level or below.

The primary reason for the continued decline in gold prices is the possibility of an interest rate hike by the U.S. Federal Reserve.

In such a scenario, the value of the dollar rises, which can diminish the relative appeal of gold.

Additionally, analysts suggest that investors worldwide are liquidating assets to prepare for the SpaceX initial public offering (IPO), which has contributed to the downward pressure on gold prices.

Furthermore, there are growing concerns that the global trend of interest rate cuts, which had been supporting gold prices, may be coming to an end, potentially shifting toward monetary tightening. There are also signs that central banks around the world are beginning to slow their pace of gold purchases.

Consequently, various gold-related financial products that soared early this year are all experiencing a downturn.

As of the 11th, the ACE KRX Gold Spot ETF has fallen nearly 22% compared to January of this year.

Experts are expressing concern over the capital outflow currently observed in the gold market.

In fact, funds have been consistently flowing out of gold ETFs since the end of January. Following the war between the U.S. and Iran, net outflows were recorded in 10 out of 14 weeks.

The market anticipates that gold is likely to maintain a downward trend for the time being amid concerns over monetary tightening.

There is a perceived risk of further declines if the price fails to find support at the current level of 4,000 dollars per ounce.

However, there is cautious optimism that there could be room for a rebound in the second half of the year once the war between the U.S. and Iran concludes.

Kiwoom Securities analyzed that "factors that have driven central bank gold purchases, such as the de-dollarization trend and geopolitical risks, still remain."

Shinhan Securities projected that "if the inflation shock passes its peak after the third quarter, there is a high possibility that investment demand will return."

Meanwhile, as of the 13th, the domestic gold market price remains high in terms of consumer perception, with one 'don' (3.75 grams) of gold priced at 894,000 won to buy and 765,000 won to sell.
※ Please note: This article was translated by AI and may contain errors.