Gold Prices Surge Amid COVID-19... Trading Volume Also Up 32 Times Year-on-Year

23,600 KRW per ounce... Highest Price This Year
Silver Prices Also UP... Supply Difficulties Due to Border Closures Increase Expectations for Price Gains

[Asia Economy Reporter Minwoo Lee] Gold prices have reached their highest level this year, accompanied by a surge in trading volume. As countries roll out economic stimulus measures, expectations that the economic slowdown caused by the novel coronavirus infection (COVID-19) will ease have led to renewed demand for gold, a safe-haven asset.

On the 8th, Korea Gold Exchange, a subsidiary of ITCEN, announced that the wholesale price of gold (based on 1 don, 3.75g) reached 236,000 KRW on the 7th, marking the highest price this year. The cumulative number of purchases in the first quarter also surged 32 times compared to the same period last year, reaching 23,274 transactions from 732. It was reported on the 8th that the strong gold prices amid the COVID-19 situation have caused a sharp increase in related trading volume.

It is analyzed that as concerns over a global economic recession due to COVID-19 have eased, demand for gold as a safe-haven asset has returned. A representative from Korea Gold Exchange explained, "Gold prices initially fell due to a massive move to secure cash amid COVID-19, but as governments and central banks around the world actively implemented economic stimulus measures, gold prices rebounded, with the international gold price showing strength by exceeding 1,660 USD per ounce (28.35 grams). While maintaining an upward trend, the market has seen an increase in gold supply for the purpose of capital gains."

Along with this, silver prices are also rising. With countries closing their borders, logistics flows have been disrupted, and the movement of mineral resources has been restricted due to port closures, causing refineries to face emergencies in securing raw materials for silver. According to Korea Gold Exchange, the number of silver transactions in the first quarter of this year was 9,473.

Song Jong-gil, Executive Director of Korea Gold Exchange, said, "The international price of silver averaged 20.8 USD per ounce over the past 10 years, but it is currently forming at a level below the average, around 14 to 15 USD. It seems that the expectation that the scale of capital gains will be greater than gold when COVID-19 stabilizes and the global economy rebounds is influencing this."