Gold Market Trading Volume Soars 74% Year-on-Year
Mon Nov 04 2024
The Korea Exchange (KRX) announced on Nov. 3 that the trading volume in the gold market had increased by over 74 percent as of the end of last month compared to the total volume for the previous year, with individual investors representing the largest share of transactions.
The price of gold on the KRX surged to record highs, driven by rapid rises in exchange rates and intensified demand for safe-haven assets. The price per gram climbed by 47 percent, from 86,940 won ($63.40) at the start of the year to 127,590 won by the end of last month.
The average daily trading volume in October reached 23.2 billion won, reflecting a 344 percent increase from the beginning of the year. The daily average trading volume rose by 21 percent over the same period, averaging 187 kilograms.
By investor type, individuals accounted for the largest share at 43 percent, followed by institutions at 37 percent and physical asset businesses at 19 percent. The number of gold trading accounts opened by individual investors at the 13 securities companies that are members of the gold market surpassed 1.2 million as of the end of June.
Meanwhile, the price of Au99.99 rose 31 percent at the Shanghai Gold Exchange, another leading physical gold market outside of the KRX, as of the end of last month compared to the beginning of the year, while average daily trading volume fell 47 percent over the same period. At the Istanbul Exchange, the price for the USD/ounce gold contract increased by 37 percent since the start of the year, while average daily trading volume declined by 20 percent.
The KRX attributed the sustained rise in gold prices to various uncertainties in the global economy, including heightened geopolitical risks and a potential rate cut by the U.S. Federal Reserve. In addition, with rising geopolitical tensions, such as the escalation of tensions in the Middle East and the ongoing conflict in Ukraine, demand for safe-haven assets has surged. The KRX also noted that the recent Fed interest rate cut cycle, beginning in the latter half of this year, has led to increased investment inflows into the gold market as a hedge against a weakening U.S. dollar.
A KRX representative stated, “With the continued preference for safe-haven assets, participation in the KRX gold market has steadily increased, reinforcing gold’s status as a major investment option. We are committed to ensuring transparency and fairness in gold trading. To this end, we are strengthening communication with market participants, including financial investment firms, precious metals businesses, and individual investors, and actively addressing any issues that may arise in transactions.”
Source: https://www.businesskorea.co.kr