"After topping 200,000 won, gold falls to the 180,000-won range"—Gold investors see 940,000 won shaved off in a month

[Financial News] Domestic and international gold prices fell nearly 10% over the course of a month, giving back some of their recent gains. The possibility of an additional policy rate hike by the Federal Reserve (Fed), a stronger dollar and rising Treasury yields were cited as factors that dragged gold prices lower.
According to the Korea Exchange (KRX) and other sources on Sept. 29, 99.99%-pure gold closed at 183,940 won per gram in the KRX Gold Market the previous day. Compared with 203,010 won on Aug. 28, the price fell by 19,070 won, or 9.4%, in one month. If someone had invested 10 million won at the time, the value of the investment would have fallen to approximately 9.06 million won.
International gold prices also fell to their lowest level in about seven weeks. The spot price of gold fell as low as $4,110.55 per ounce during trading on Sept. 28 local time, recording a decline of around 4%. It was the lowest level since Aug. 5. Gold closed at $4,136.81, down 3.61% from the previous session, after exceeding $4,500 per ounce on Aug. 28.
The possibility of additional tightening in the United States has been cited as a factor behind the recent decline in gold prices. With international oil prices rising, inflationary pressure has increased again, prompting expectations that the Fed could raise its policy rate further.
A stronger dollar and rising U.S. Treasury yields also contributed to the decline in gold prices. Because gold generates no interest when held, higher market interest rates make it less attractive than interest-bearing assets such as bonds. The dollar's appreciation also affected prices by increasing the cost of buying gold for investors who use other currencies.
For domestic investors, the won-dollar exchange rate is another factor that determines gold returns. International gold prices are denominated in dollars, while gold is traded in won on the KRX Gold Market.
Meanwhile, funds continued to flow into gold exchange-traded funds (ETFs) even as gold prices underwent a correction. According to the World Gold Council (WGC), global gold ETFs recorded net inflows of $18 billion in August, the second-highest amount ever. Holdings also increased by 121 tons in one month to 4,189 tons, marking a record high.
The World Gold Council cited concerns over exchange-rate policies, instability in the U.S. Treasury market and investment demand driven by rising gold prices as the reasons behind the inflows. The World Gold Council analyzed, "As gold prices rose and broke through key technical price levels, price momentum may have attracted additional tactical and institutional investment demand."


[email protected] Han Seung-gon Reporter