The price of gold on the Korea Exchange (KRX) hit 139,980 won ($95.87) per gram as of 10:40 a.m., marking a 1.43 percent increase from the previous day and extending a 3.6 percent surge from Monday. The rally represents a 60.8 percent jump from a year ago, setting the highest level since the market’s inception in 2014.
The surge in gold prices comes despite continued dollar strength, with the U.S. dollar index climbing 0.6 percent to 108.87 against a basket of major currencies. The Korean won weakened to 1,460.2 per dollar during intraday trading.
Gold investments have gained momentum as South Korean investors increase their holdings.
The number of gold banking accounts at the country’s three major commercial banks - KB Kookmin, Shinhan, and Woori - rose to 274,976 as of Jan. 24, adding 23,000 new accounts in just a year. Total deposits in gold accounts swelled to 779 billion won ($533 million), a 50.5 percent increase from the end of 2023.
The rally follows U.S. President Donald Trump’s Feb. 1 executive order imposing new tariffs of up to 25 percent on imports from Canada and Mexico, while lowering a planned levy on Chinese goods to 10 percent. The move has heightened inflation concerns and market volatility, further boosting demand for gold as a store of value.
"Despite the strong dollar, demand for gold is rising as both a safe-haven asset and an inflation hedge amid external uncertainties and tariff-driven price pressures," said Lee Hyo-seob, a research fellow at the Korea Capital Market Institute.
He noted that gold price volatility is likely to intensify in the near term, even if the dollar weakens.
A report by the Korea Center for International Finance also highlighted a growing decoupling between gold prices and traditional indicators such as real interest rates, attributing the rally in part to increased gold purchases by central banks, including China.
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