Summary
- It said that international gold futures prices and domestic gold prices fell 5.6% over the past week and extended losses for five straight sessions, respectively.
- It said that major domestic gold ETFs—'ACE KRX Gold Spot', 'TIGER Gold Futures (H)', 'KODEX Gold Active', and 'SOL International Gold'—all posted negative returns.
- It said that as rate-cut expectations have weakened amid the Fed’s hawkish stance, institutions are net buying ACE KRX Gold Spot for 11 consecutive sessions on expectations the war could be prolonged.
Forecast Trend Report by Period
International gold futures down about 6% in a week
As inflation delays U.S. rate cuts
Gold prices, traditionally seen as a safe-haven asset, have extended a day-after-day decline. Despite geopolitical tensions stemming from the Middle East and rising oil prices, investor appetite for gold has cooled as expectations for U.S. Federal Reserve (Fed) rate cuts have retreated quickly.
According to Investing.com on the 19th, April gold futures on the New York Mercantile Exchange closed the previous day at $4,839.15 per troy ounce, down 5.6% from a week earlier. It marked the first time in a month—since Feb. 19—that gold futures fell from the $5,000 level into the $4,000 range.
Domestic gold prices also failed to avoid the weakness. On the day, gold on the KRX Gold Market closed at 231,420 won per gram, down 2.37% from the previous day, extending losses for a fifth consecutive session. As gold prices that had been on a steep run until recently reverse course, market unease is growing.
Gold-related exchange-traded funds (ETFs) also posted negative returns across the board. Among domestic gold ETFs, the largest by net asset value, 'ACE KRX Gold Spot', closed at 32,210 won, down 5.1% from the prior week. 'TIGER Gold Futures (H)' fell 6.4%, while 'KODEX Gold Active' and 'SOL International Gold' each slid 5.3%.
The market is pointing to the Fed’s hawkish stance as the key backdrop for the drop in gold prices. A sharp rise in oil prices often stokes inflation concerns, undermines currency value, and tends to lift the price of gold, a representative hard asset. This time, however, that dynamic failed to gain traction as expectations for policy-rate cuts weakened. Gold becomes less attractive than interest-bearing assets such as bonds the longer a high-rate environment persists. Still, institutional investors appear to be positioning for a medium- to long-term rebound in gold, as safe-haven demand could strengthen again if the war drags on. According to ETFCheck, institutions were net buyers of 'ACE KRX Gold Spot' for 11 consecutive sessions through the 18th.
By Lee Seon-a suna@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
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