“Is It Too Late to Buy Now?” Gold Prices Expected to Rise Further… 200 Billion Won Bet by Retail Investors on This Investment Option

More Bets on Gold as the Dollar Weakens
A Variety of Investment Options: Domestic and Global Stocks, ETFs, and Digital Gold

As confidence in U.S. Treasury bonds is being shaken and gold prices have recently shown strong gains, interest in investing in gold is also rising.

View original image

Previously, the U.S. Department of the Treasury significantly expanded the scale of its bond buyback program in order to prevent a sharp drop in long-term Treasury prices (and the resulting spike in yields). This move led to concerns about a decline in the real purchasing power of the U.S. dollar, which in turn spurred a “debasement trade.” The debasement trade refers to an investment strategy of allocating funds to physical and alternative assets, in anticipation of the decline in the real value of legal tender (paper currency) due to excessive government debt accumulation and reckless money supply. As a result, some now expect that gold prices will regain the $5,000 level within this year.

Interest in gold investing is also growing among domestic investors. There are various investment options, including listed securities domestically and abroad, as well as associated exchange-traded funds (ETFs).

In Korea, representative stocks expected to benefit from strong gold prices include Korea Zinc, Elcomtek, and ITCen Global. Korea Zinc sells gold and silver that are recovered in the zinc and lead smelting process. The company’s gold sales increased by 58% in the first half of this year. Elcomtek, which holds exploration rights to a Mongolian mining district, has emerged as a leading theme stock when gold prices rise. ITCen Global owns Korea Gold Exchange as a subsidiary. Among foreign stocks, there are companies like Newmont (NEM), the world’s largest gold mining company, and Pan American Silver (PAAS).

If the volatility of individual stocks is a concern, diversified investment through ETFs is also an option. The ACE KRX Gold Spot ETF, which invests in physical gold, and GLD, listed on the U.S. stock market, serve as stable long-term inflation hedges. The cumulative net buying by individuals in the ACE KRX Gold Spot ETF surpassed KRW 200 billion since the beginning of the year. In addition, TIGER KRX Gold Spot, KODEX Gold Futures (H), and HANARO Global Gold Mining Companies have also recorded high returns recently.

So-called “digital gold,” traded in small amounts via mobile platforms, is also gaining attention as an investment vehicle. According to the Busan Digital Asset Exchange BDAN, the trading volume of its physically backed gold product, “e-gold,” increased by 53.5% in the second week of August compared to the fourth week of July. E-gold is a digital product based on physical gold, and can be traded in units as small as 0.01 grams through the BDAN mobile application. Its advantages include the ability to invest in gold price changes starting from small amounts, without the need to purchase gold bars in bulk or store them directly. Traded e-gold can be exchanged for physical gold.

© The Asia Business Daily. All rights reserved. Unauthorized AI training and use prohibited.