"Now's the Time to Buy This, Not Stocks... at a Record-Low Valuation" [Jumal Money]

Gold prices fall amid rising benchmark rate expectations and real interest rates
Gold demand continues to rise steadily in the third quarter of 2026

Analysts say November and December this year are the best time to buy gold, as demand is picking up while gold remains undervalued.

An employee holds up a gold bar at the Korea Gold Exchange in Jongno-gu, Seoul. Yonhap News Agency

On November 7, LS Securities said gold was more undervalued than at any time since 2022. The spot price, which was in the $5,000-per-ounce range in February, fell to around $4,000, rebounded to around $4,600 in August, and then slipped back to around $4,000.

Gold prices, which had rebounded, fell again as expectations for the U.S. policy rate shifted and long-term real interest rates rose. Expectations for the policy rate were revised upward by more than 1.5 percentage points since the start of the year amid concerns about inflation following a sharp rise in oil prices. Real interest rates also rose as U.S. Treasury yields surged, outpacing long-term inflation expectations.

With gold prices falling in this environment, its undervaluation has become more pronounced. Last month, the stock market weakened at the same time as gold prices fell. This means selling pressure on gold is intensifying as liquidity comes under strain during a stock market downturn. That, in turn, creates greater opportunities to buy gold at lower prices.

Gold demand has been rising steadily in the third quarter of this year. It is divided into demand for jewelry and adornments, industrial use, central banks, and investment. Demand for jewelry and adornments has declined because gold prices are higher than in the past, but in terms of total value, it is at a record high. Industrial demand has held steady regardless of gold prices. Among investment demand, demand for physical gold bars and coins has declined since the first quarter of this year, but demand for exchange-traded funds (ETFs) rose in the third quarter, bringing in bargain hunters. Central banks continued to increase their gold purchases in the third quarter, supporting a floor for gold prices.

Hong Seonggi, a researcher at LS Securities, said, "Given that the market has priced in an additional 0.5 to 0.75 percentage point increase in the U.S. policy rate, we believe the decline in gold prices has already been excessive." He added, "When the United States raised its policy rate by 5.25 percentage points from March 2022 to July 2023, the spot price of gold moved from $1,980 to $1,960 per ounce. Assuming policy rate hikes come to an end in the first half of next year, this year is the optimal time to buy gold at lower prices."

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