Gold Prices Hit 7-Week Low Amid Expectations of Interest Rate Hikes

[Anchor]

It is Wednesday, and we have reporter Han Jiyeon with us for "Friendly Economy." Reporter Han, gold prices have fallen significantly lately, haven't they?

[Reporter]

Domestic gold prices have dropped by more than 10% over the past month.

International gold prices have hit their lowest level in 7 weeks.

Gold prices had been fluctuating after reaching an all-time high in the mid-$5,000 range in January of this year.

Prices were in the $4,500 range on August 28, but rebounded to the $4,360 level on September 22 as international oil prices plunged.

However, that rebound momentum has now broken, leading to an even steeper decline.

According to the Korea Exchange, gold closed at 181,460 won per gram on the KRX gold market yesterday (September 29).

This is 10.6% lower than a month ago.

If you had invested 10 million won in gold back then, your current valuation would have dropped to around 8.94 million won.

The same goes for international gold prices.

Prices recently slipped to $4,110 per ounce, marking a 7-week low.

Considering they exceeded $4,500 per ounce just a month ago, that is a substantial drop.

Behind this trend are expectations that the United States could raise interest rates further.

As international oil prices have risen recently, increasing inflationary pressures, weight is being added to the prospect that the Federal Reserve might implement additional rate hikes.

In addition, the rising Treasury yields have driven the US dollar to strengthen, further diminishing the investment appeal of gold, which yields no interest.

[Anchor]

It certainly seems like gold has fallen out of favor with investors lately.

[Reporter]

It is somewhat difficult to definitively predict how things will unfold moving forward.

However, record amounts of funds poured into gold ETFs prior to this recent plunge.

According to the World Gold Council, $18 billion in net inflows flowed into global gold ETFs last August.

This is the second-largest monthly volume on record.

Holdings also increased by 121 tons to reach a record high of 4,189 tons.

Looking ahead, US monetary policy will be the key factor.

If expectations for rate hikes grow, prices could fall further, but economic uncertainty or geopolitical risks could instead support demand for safe-haven assets.

Additionally, with inflation concerns expected to gradually ease going forward, some projections suggest gold prices could recover the $5,000 per ounce mark within the year.

Therefore, we will need to monitor whether this current decline leads to a long-term bearish trend.

[Anchor]

Lastly, is there a savings account where you deposit 100 won a day?

[Reporter]

It is a one-month savings product where you can deposit starting from 100 won a day, and it has become popular among the 2030 generation by adding fun elements like a game.

This trend is currently referred to as "jjantech" (frugal tech).

KakaoBank has already been selling a product called "One-Month Savings" since October 2023.

It offers a top rate of up to 6% per annum if you deposit anywhere from 100 won up to 30,000 won a day, and cumulative accounts surpassed 15 million by the first half of this year.

Recently, a new version collaborating with Samsung C&T was added to this one-month savings lineup.

It works by giving out shopping mall points and discount coupons based on the number of days you successfully made deposits over 31 days.

Toss Bank also launched a 31-day maturity savings product last month where you can deposit a maximum of up to 5,000 won a day.

The interest rate increases based on the number of successful savings deposits, allowing you to receive a 10% annual interest rate if you complete all 31 days.

However, you should not assume the interest is large just by looking at the 10% figure.

Since the maximum daily deposit is 5,000 won, the total principal for a month is 155,000 won, and even if you complete the full term, the actual pre-tax interest is only about 679 won.

It is closer to a product that helps build a daily savings habit rather than one that grows a large amount of money.

It surpassed 100,000 accounts within four days of launch, and has now broken past 300,000 accounts.

The secret to its popularity is simple.

The daily deposit amount is small and the period is short, reducing the financial burden.

Gamification elements have also been added to make it entertaining.

For both products, instead of automatic transfers, users must log directly into the app to deposit funds.

Every time a deposit is made, a character pops up to provide benefits or grow along with the amount saved, adding an element of fun.

Consumers build savings habits without pressure, while banks get customers to log into the app every day.

For those who want to save small amounts without burden, it might be worth checking out.
※ Please note: This article was translated by AI and may contain errors.