FINANCE

Gold shines on virus-fueled haven appeal

By Yonhap
  • Published : Jul 14, 2020 - 09:16
  • Updated : Jul 14, 2020 - 09:16

(Yonhap)

South Korean investors in gold have posted sky-high returns this year amid strong safe-haven demand caused by the coronavirus pandemic, data showed Tuesday.

Gold changed hands at 261,423 won ($217) per 3.75 grams on the Korea Exchange as of Friday, up a whopping 23.3 percent from the start of the year, according to the data from Daishin Securities Co.

Gold marks the highest-yielding investment vehicle over the cited period, far outperforming time deposits, bonds, the US dollar and stocks.

Subscribers to bank time deposits, which offer an annual interest rate of 1.5 percent, have registered a return rate of a mere 0.79 percent during the period, nearly 29 times lower than that of the yellow metal.

Comparable yields were 2.1 percent for investors in bonds and 4 percent for dollar buyers.

In contrast, investors in local stocks have lost money over the cited period as the equity market suffered setbacks amid the fallout from the COVID-19 outbreak.

The KODEX 200, an exchange-traded fund (ETF) linked to the top 200 firms listed on the main bourse, declined 4.02 percent, with domestic stock funds posting a negative average return rate of 2.3 percent.

Gold's stellar performance comes as the coronavirus pandemic has escalated economic uncertainties, prompting investors to rush for safe-haven assets.

With no immediate signs of the coronavirus outbreak easing in sight, gold prices are tipped to remain strong for the time being.

"The economic shock from the novel coronavirus has cemented gold's safe-haven appeal," said Kim So-hyun, an analyst at Daeshin Securities. "There is a high possibility that the upturn in gold prices may continue as long as interest rates remain low." (Yonhap)