With the unpredictable tariff policy of U.S. President Donald Trump, global economic uncertainty is maximized, and investors' 'safe-asset preference' phenomenon is becoming increasingly clear. Typical safe assets like gold prices are on a continuous high, and related virtual assets are also showing strength. Additionally, investors are continuing to buy low-priced U.S. dollars amid its weakness.
On the 21st, funds in the market are rapidly shifting to safe assets due to increased global economic uncertainty. Gold investment is a prime example. The gold bar shortage that began at the start of the year continues. The gold bar sales of the top 5 commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) were tallied at 20.78 billion won until the 17th of this month. This is more than double compared to the total 9.94 billion won sold in the same month last year.
The gold banking account balance has also surged dramatically. The gold banking balance of KB Kookmin, Shinhan, and Woori Banks was tallied at 1 trillion 64.9 billion won as of the 17th, which is more than double the amount from April 2023 (523.9 billion won) after two years.
Investors continuing to invest despite daily gold price surges demonstrates the extreme economic uncertainty. Particularly, wealthy asset holders are showing a clear preference for gold. According to Hana Financial Research Institute, one out of three domestic individuals with over 1 billion won in financial assets have invested or plan to invest in gold.
International gold prices first broke through $3,000 per ounce on the 15th of last month and reached a record high of $3,350 during trading on the 17th. However, with market concerns about the potential long-term 'Trump risk', many believe gold prices will continue to rise. Global investment bank Goldman Sachs predicts gold prices could reach $3,700 by the end of this year and potentially $4,000 by mid-next year.
NH Investment Securities researcher Hwang Byung-jin analyzed that "concerns about stagflation due to the U.S. universal and reciprocal tariff policy are also supporting the record-high gold price rally".
Investor interest in another safe asset, the U.S. dollar, is also rising again. Despite recent exchange rate declines due to the tariff war, the dollar remains a reliable safe asset for investors. The dollar deposit balance of the top 5 commercial banks was 607.44 million dollars as of the 17th, a 4.7% increase from 580.2 million dollars at the end of last month. After dropping to 563.5 million dollars on the 10th, it increased by over 40 million dollars in five trading days.
This is analyzed as investors pursuing 'low-price buying' amid growing global recession concerns. The exchange rate reached a 16-year high of 1,484.1 won on the week of the U.S. reciprocal tariff implementation, comparable to the 2009 financial crisis level. However, it subsequently dropped to 1,418.9 won on the 17th.
Meanwhile, virtual assets linked to gold are also showing strength. According to CoinMarketCap, as of 2:30 PM, the gold-linked coin Tether Gold (XAUT) has risen 12.44% in the past month and 4.99% in the past week, trading at $3,403.53. Another gold-linked coin, Pax Gold (PAXG), has also risen 11.87% in a month and 4.79% in a week, currently at $3,403.87.
Pax Gold is an Ethereum-based token directly linked to physical gold, increasing investment accessibility through small-amount gold investments. Tether Gold is based on physical gold stored in Swiss vaults and supports fractional trading, complementing physical gold trading limitations.
In contrast, the representative virtual asset BTC has seen a relatively moderate increase during the same period. Currently, BTC is at $87,369, rising only 3.63% over a month. While recovering from the previous week's decline, it shows high volatility and weaker investment sentiment compared to gold-linked assets.
