"Money could become toilet paper"…Where large sums are flocking amid fear of becoming suddenly poor

Gold exchange-traded funds (ETF) that had peaked and were taking a breather are rebounding. Analysts say that gold's investment appeal has increased as the won has depreciated due to a high exchange rate and the U.S. central bank (Fed) is more likely to cut interest rates.

According to ETFCheck on the 27th, 'ACE KRX Gold Spot' rose 3.94% over the past month. 'TIGER KRX Gold Spot' and 'SOL International Gold' also rose 3.83% and 4.15%, respectively, over the same period. On the New York Mercantile Exchange, gold futures for delivery in February next year closed the previous day at 4,217 dollars per troy ounce, approaching the previous high (4,359 dollars). As gold prices rebound, 'HANARO Global Gold Mining Companies', which invests in global gold mining firms, also surged 15.25% over the month.

Large sums are also flowing into domestic gold funds. According to financial data firm FnGuide, assets under management of the 13 gold funds traded domestically increased by 227.2 billion won so far this month. Individual investors net-bought 165.5 billion won and 57.7 billion won worth of 'ACE KRX Gold Spot' and 'TIGER KRX Gold Spot', respectively, during this period.

Securities firms forecast that buying pressure for gold will increase in a high exchange rate and U.S. policy rate cut environment. According to the CME FedWatch, the probability that the Fed will cut the policy rate by 0.25% point in December is 84.9%, a sharp rise from a week ago (39.1%). As the global stock market falters amid AI bubble concerns, gold's appeal as a safe-haven asset is also increasing.

A representative of an asset management company said, "Amid a continuing weak-dollar phenomenon in global markets, the won has shown the largest weakness among major currencies, increasing fear of cash value erosion," adding, "In a situation of heightened stock market volatility, gold has emerged as the best investment."

On Wall Street, there are also forecasts that gold prices will trend upward next year. Bank of America (BofA) predicted that next year's gold price could surge to 5,000 dollars per troy ounce, citing expectations that monetary value will decline due to increased fiscal spending by the Donald Trump U.S. administration. Goldman Sachs also said, "Expanded gold purchases by global central banks and a loosening monetary policy stance will drive gold price increases," and "expects gold prices to reach 4,900 dollars by the end of next year."

Reporter Maeng Jin-gyu maeng@hankyung.com