With tensions between the United States, Israel, and Iran escalating, investors are turning to gold as a safe-haven asset. While rising gold prices have piqued investor interest, the returns of domestic and international gold exchange-traded funds (ETFs) are diverging.
As of January of this year, domestic gold ETFs had outperformed international gold prices thanks to the "kimchi premium," which was a premium that placed domestic gold prices higher than international gold prices. However, the recent demise of this premium has reversed the situation. For example, international gold-backed ETFs KODEX Amountive and SOL International Gold each recorded returns exceeding 25%. In contrast, the ACE KRX Gold Spot ETF and the TIGER KRX Gold Spot ETF, which are based on the domestic KRX gold market, have only seen returns in the 20% range.
This difference in returns has become even more pronounced over the past month. While ETFs tracking international gold prices have recorded returns exceeding 16%, those tracking domestic gold prices have only achieved returns in the 5% range. This appears to be due to the fact that, while the domestic gold market previously maintained high prices in the short term due to the kimchi premium, volatility has increased as the price gap with international gold has narrowed.
Financial experts emphasized the stability of international gold prices and said that long-term investments in gold require caution to avoid being influenced by premiums driven by domestic circumstances. This is because international gold prices reflect the fundamental principles of the global market and thus exhibit relatively low volatility.
This trend is likely to continue. If domestic and international tensions persist, interest in gold, a safe-haven asset, will remain steady, and products that track international gold prices can offer relatively stable returns. Therefore, it's crucial for investors considering investing in gold to carefully analyze various market prices before making a decision.
Get real-time news... Go to TokenPost Telegram
Are you missing out on the timing to buy and sell?
Determine your investment direction with real-time good/bad news signals.
Copyright © TokenPost. Unauthorized reproduction and redistribution prohibited.
