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Gold prices, which had been rebounding, are on a downward trend once again in the wake of rising global interest rates.
According to the Korea Exchange and Yonhap Infomax today (September 2), the closing price of domestic gold (99.99_1kg) dropped 2.79% from the previous trading day to close at 190,800 won per gram.
This marks the lowest level since August 5, when it recorded 190,800 won.
Gold prices had previously trended upward as US inflation indicators showed stability, pushing back expectations for interest rate hikes by the Federal Reserve (Fed).
Because gold is a physical asset that does not yield interest like bank deposits or bonds, its prices typically tend to rise when interest rates fall, as the opportunity cost of holding gold relatively decreases.
The US Consumer Price Index (CPI) and Producer Price Index (PPI) for July, announced last month, recorded a seasonally adjusted 0.1% increase and flat growth, respectively, compared to the previous month.
Following the CPI meeting expectations, the PPI also showed stable results, easing concerns over the Fed's interest rate hikes.
Consequently, gold prices trended upward, reaching up to 208,300 won on August 25.
However, gold prices have recently begun to fall again.
This is seen as the effect of market interest rates rebounding as armed clashes resumed between the US and Iran in the Middle East, causing international oil prices to skyrocket and inflation concerns to grow.
After the US military carried out additional airstrikes against Iran, Iran immediately retaliated by targeting US military bases in the Middle East with ballistic missiles and drone attacks.
In the aftermath, overnight international oil prices surged by around 5%, with West Texas Intermediate (WTI) crude for October delivery exceeding 90 dollars per barrel.
As a result, the yield on 10-year US Treasury bonds surpassed 4.8% in Asian trading as of this afternoon, while the 10-year Japanese government bond yield also exceeded 3.0%.
Lee Kyung-min, a researcher at Daishin Securities, stated, "The surge in oil prices has once again stimulated inflation concerns and acted as upward pressure on government bond yields in major countries," adding, "Accordingly, the probability of an interest rate hike at the September FOMC (Federal Open Market Committee) based on the Chicago Mercantile Exchange's FedWatch has risen to 68%, amplifying concerns over tightening."
Influenced by this, the dollar index also rebounded.
The dollar index, which measures the value of the dollar against six major currencies, stood at 99.724 as of 3:30 PM, nearing 100.
It even climbed as high as 99.807 at one point.
Ok Ji-hee, a researcher at Samsung Futures, said, "Precious metals fell across the board as armed conflict between the US and Iran intensified, causing oil prices, the dollar index, and US Treasury yields to rise simultaneously."
(Photo: Yonhap News)
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