Gold Prices Plummet: From Over 1.1 Million Won to 800,000 Won—Is Now the Time to Buy?

Gold prices, which soared to over 1.1 million won per don (3.75 grams) earlier this year, have fallen to the 800,000 won range.

The sharp decline in gold prices is attributed to a combination of factors, including the possibility of interest rate hikes by the U.S. Federal Reserve, a strong dollar, and the investment frenzy surrounding artificial intelligence.

In the New York market yesterday, the spot price of gold closed at $3,992.44 per ounce, or approximately 6.17 million won, down 3% from the previous day.

This marks the first time in about seven months, since last November, that the international gold price has fallen below $4,000 per ounce.

This figure represents a sharp decline of approximately 28.6% from the all-time high recorded in January of this year.

Generally, a decline of 20% or more from a peak is considered a signal of entering a bear market.

During the same period, the domestic spot price of gold, which had approached 270,000 won per gram, has also fallen below 200,000 won.

In the domestic market, pure gold was traded at around 860,000 won per don when buying and around 720,000 won when selling.

Amid expectations that gold prices will continue to fall, capital outflows from gold-related ETFs are also continuing.

Changes in U.S. monetary policy have influenced the sharp drop in gold prices.

As follow-up negotiations for the end of the war between the U.S. and Iran are underway, the possibility of additional tightening by the Federal Reserve has been highlighted. With both Treasury yields and the value of the dollar rising, the investment appeal of gold has relatively weakened.

The AI investment frenzy has also played a role.

Analysts suggest that investment funds are shifting from safe-haven assets like gold to the stock market, driven by rallies in the semiconductor sector.

However, some predict that because central banks around the world continue to purchase gold, international gold prices are unlikely to fall further and are likely to find support around the $3,900 level.

Reported by Jung Da-eun | Video by Jang Yu-jin | Graphics by Yang Hye-min | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.