"Did I Sell Too Soon?" Projections Reach 765 Million Won... Even ETFs Stir as Gold and Silver Surge Again

Interest Rate Hike Unlikely... Gold and Silver ETFs Begin to Rebound

Gold ETFs Up 2%, Silver ETFs Rise Over 4%


U.S. Employment Data Falls Short of Expectations... Probability of Rate Hike Drops

Zero-Yield Assets Gold and Silver Pr

As U.S. employment indicators fell short of expectations and optimism for interest rate hikes weakened, gold and silver-related Exchange Traded Funds (ETFs) began to rebound. With some forecasts projecting that gold prices could exceed $5,000 per ounce, the market is closely watching future trends.

Gold prices, which peaked at $5,595 per Troy ounce at the end of January this year, dropped to the $3,959 range on the 24th of last month before rising back up to $4,200. There are also forecasts that gold prices will rise further. Additionally, 30% have stated plans to increase their gold holdings within the next one to two years. Getty Images

According to the Korea Exchange on July 4, ACE KRX Gold Spot ETF closed up 2.41% on July 2, TIGER KRX Gold Spot ETF rose 2.11%, KODEX Gold Futures (H) climbed 2.75%, and TIGER Gold Futures (H) increased 2.65%. Silver-related ETFs also saw gains across the board: 1Q Silver Active ETF was up 4.90%, KODEX Silver Futures (H) rose 4.59%, TIGER Silver Active ETF gained 3.54%, and TIGER Gold Silver Futures (H) closed up 2.82%.

Earlier, on July 2 (local time), U.S. nonfarm payrolls for June increased by 57,000 compared to the previous month, missing the projected figure of around 110,000, which eased concerns about further rate hikes. International media, including CNBC, reported that after the release of these employment figures, the Chicago Mercantile Exchange (CME) FedWatch tool reflected a probability of less than 30% for a rate hike at the upcoming Federal Open Market Committee (FOMC) meeting scheduled for July 29.

Gold and silver are non-interest-bearing assets, so when the likelihood of an interest rate hike diminishes, their relative appeal increases. The sharp drop in gold and silver prices during the U.S.-Iran war was also related to interest rates. Typically, the prices of safe-haven precious metals rise when war breaks out, but in this situation, concerns over inflation and the possibility of U.S. rate hikes played a bigger role, leading instead to a decline in prices.

Gold prices, which peaked at $5,595 per troy ounce at the end of January this year, dropped to the $3,959 range on the 24th of last month before rising back up to $4,200. There are also forecasts that gold prices will rise further. According to a recent survey by the Official Monetary and Financial Institutions Forum (OMFIF) of 74 central banks managing assets of over $10 trillion, 64% expect gold prices to surpass $5,000 per ounce by June next year. Additionally, 30% have stated plans to increase their gold holdings within the next one to two years.

Kwon Jiwoo, a researcher at Hanwha Investment & Securities, stated, "Although there was a short-term correction after the war, the fundamental support for gold and silver has strengthened." He added, "Central bank purchases are key for gold. In the first quarter, net central bank gold purchases reached 244 tons, marking the largest quarterly figure in 25 years. For silver, the inelasticity of supply further supports its price. This year is expected to mark the sixth consecutive year of supply shortages, and with approximately 70% of silver supply coming as a by-product of other metals, it is difficult to independently increase production even if prices rise."

Nam Yongsoo, head of ETF Division at Korea Investment Management, commented, "Due to additional rate hikes, a high interest rate environment, and the strong U.S. dollar, downward pressure on gold prices may persist in the short term. However, considering the ongoing trend of global central bank gold purchases, we believe there is still investment value in gold in terms of asset allocation over the long term." He added, "We are closely monitoring moves toward interest rate cuts as a potential inflection point for a rebound in gold prices."

This content was produced with the assistance of AI translation services.