Gold, long seen as a key safe-haven asset, has fallen sharply in the wake of the war in the Middle East, drawing attention to shifting and potentially volatile money flows into gold-related exchange-traded funds. As gold weakens despite heightened geopolitical risk, analysts say investor sentiment appears to be changing.
According to the Korea Exchange on May 3, as of April 30 the domestic gold price on the KRX Gold Market was 217,240 won per gram, the lowest level so far this month. That is about 20% below the record high set on Jan. 29, when the closing price reached 269,810 won.
The decline has weighed on gold ETF prices. Based on April 30 closing prices, ACE KRX Physical Gold ended at 30,340 won, TIGER KRX Physical Gold at 14,430 won, and KODEX Gold Futures (H) at 25,935 won, with all showing a broadly weaker trend.
The drop is clearer compared with about two weeks earlier. On April 13, ACE KRX Physical Gold closed at 31,605 won, TIGER KRX Physical Gold at 15,115 won, and KODEX Gold Futures (H) at 26,870 won, indicating that ETF prices fell alongside the recent pullback in gold.
Even compared with the post-war low on March 23, the rebound has been limited. As of April 30, ACE KRX Physical Gold rose about 3.67% from 29,265 won to 30,340 won, while TIGER KRX Physical Gold gained 8.20% from 13,970 won to 14,430 won. Over the same period, KODEX Gold Futures (H) climbed 7.17% from 24,200 won to 25,935 won.
Market participants have pointed to a stronger dollar and shifts in global liquidity as key factors behind the sharp fall in gold. They also say that even as tensions in the Middle East have intensified, demand for safe-haven assets has spread to other areas, weakening gold’s relative appeal.
Experts are watching for wider short-term swings in gold and related ETFs. They say the next direction for gold will depend heavily on U.S. interest-rate policy and the dollar’s path, and that investors in gold ETFs should be mindful of near-term volatility while taking a longer-term view. Still, some see a strong chance that prices could resume an upward trend over the medium to long term, supported by safe-haven demand and expectations around monetary policy.
* This article has been translated by AI.
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