Gold prices and gold fund yields are soaring as expectations for central bank interest rate hikes weaken and the risk of North Korean nuclear crisis widen.

According to the Korea Exchange, gold prices at the end of the day were USD 1338.49 per ounce. That was up 0.21 % from the previous day, 16.46 % higher than the closing price at the end of last year (USD 1149.30).

The gold price has been on the rise as observations suggest that the central bank`s rate hike will be difficult. Recently, the price of nuclear power has soared due to the overlapping of nuclear risks. Gold prices are likely to rise for the time being as the Diwali festival, the largest gold festival in the world, is held in India, the world`s largest gold consumer, in October and November. Indians are contributing gold as a gift during the festival, helping to raise gold prices.

As gold prices have risen sharply, investors` interest in the gold tech has been rising. The return on gold funds, which plunged last year, has rebounded since the beginning of the year.

Meanwhile, according to the F & B guide, all of the gold funds with a set value of more than KRW 1 billion have a positive return of 10% since the beginning of the year.

Of these, Korea Investment Trust`s KINDEX Gold Leverage Special Assets Index Fund (Gold-Derivative) (Composite H) fund had a return of 28.28% since the beginning of the year, and Mirae Asset TIGER Metal futures special asset index index funds [metal-derivatives] `funds had a return of 20.62%.

Besides, `Samsung KODEX Gold futures special asset index index fund`, `Mirae Asset TIGER gold futures special asset index index investment trust [metal-derivative type]` fund, `Mirae Asset index gold special asset Investment trusts (gold-for-stocks) type C-e `funds also showed returns of 14.90%, 13.67%, and 12.78%, respectively.

Securities experts expect gold prices to continue rising until next year. However, he advised that it is advisable to go ahead with buying at a time when geopolitical risks are resolved.

"Gold prices are at the bottom of the long run," said Kim Hoon-gil, a researcher at Hana Financial Investment Corporation. "Gold prices are expected to exceed USD 1,400 an ounce by the end of the year, Kim said, "However, as the gold price has soared due to the North Korean nuclear crisis in the last two weeks, the risk seems to fall below USD 1,300 an ounce."

By Kim Min Su minsu@


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