photo = Reuters
As uncertainty in the global economy grows due to concerns over the novel coronavirus mutation, investors’ preference for safe assets is also increasing. An increasing number of investors are looking to buy gold, a representative safe-haven asset, as market volatility such as stocks and cryptocurrencies is expected to increase. However, at this point, the opinions of experts on gold investment are mixed. While there is an opinion that the gold price is likely to continue to rise as uncertainty has increased due to the recent emergence of the corona micron mutation, there is also an opinion that, unlike in the past, strong substitutes such as Bitcoin are emerging, and the value of gold as a safe asset has fallen. Monetary tightening movements such as the US tapering (reducing asset purchases) and raising the benchmark interest rate are also considered factors that could lower the price of gold in the future. Experts advise that a split-buy strategy will be effective whenever gold prices fall in terms of allocating the entire portfolio.
“It will double in a few months.”
According to Bloomberg, a leading US economic media, recently citing experts from former CEOs of Gold Corporation, Canada’s largest gold producer, the international gold price will soar from the current level of $1,700 to $1,800 per troy ounce (about 31.1 g) to $3,000 in a few months. predicted. In other words, the preference for gold as a safe asset is inevitable due to economic uncertainties such as global money supply and debt expansion and supply chain bottlenecks. Bloomberg presupposed this to be “the opinion of gold producers,” but said it was “very unusual for them to expect a surge in gold prices in a short period of time.”
Gold is a representative safe-haven asset whose value rises when inflation risks increase and the economy slows. As more and more investors predict that the pace of economic growth will slow down due to the longer-than-expected inflationary trend, the value of gold is showing a modest upward trend. Shares of gold exchange-traded funds (ETFs) and gold mining companies such as Barakdold and Newmont are also maintaining an upward trend.
“Buy in installments whenever the price goes down”
Nevertheless, domestic bank private bankers (PB) are ordering a rather cautious approach. Experts are recommending buying at a low price in terms of portfolio allocation, as the issue of interest rate hikes by central banks as well as in Korea still remains and global gold investment must take into account the impact of exchange rates. Yoon Jeong-ah, head of Shinhan PWM Gangnam Center, said, “The current gold price is 79 million won per kg (the price includes 10% VAT based on gold bars), which is not very cheap. ” he said. Kim Hee-jeong, head of the All 100 Advisory Center at Nonghyup Bank, said, “There are many opinions that the proportion of cash should be increased at the end of the year, so it is difficult to see that the demand for gold has increased in earnest. said
how to invest in gold
There are many different ways to invest in gold. Buying gold bars is the most basic direct investment method. Gold bars can be purchased through private distributors such as the Korea Gold Exchange or commercial banks. However, when purchasing a gold bar, a 10% VAT is applied and a 5% spread (price difference) from the base price is not easy to make a profit.
It is also possible to invest through the Korea Exchange (KRX). It is a method of buying and selling like stocks according to the market price announced by the home trading system (HTS) and mobile trading system (MTS) of securities companies. Transaction fees are as low as 0.6%, and trading profits are tax-free. It is also possible to withdraw more than 100g of gold in physical form. Another advantage is that income from investment in gold is excluded from comprehensive financial income taxation.
Examples of indirect investment include gold bankbooks (gold banking), gold funds, and gold ETFs. When a bankbook is deposited in a bank account, the balance changes according to the international gold price. Small investment is possible and redemption is easy. In accordance with the Financial Consumer Protection Act, a new bankbook can only be subscribed to by proving certain investment experience. Recently, gold ETFs, whose yields move similarly to gold prices, and gold indexes as an underlying asset, are also popular.
By Kim Dae-hoon, staff reporter daepun@hankyung.com
ⓒ Hankyung.com, unauthorized reprinting and redistribution prohibited
