Gold prices in South Korea have continued to gain as investors seek to park their money in safer destinations amid escalating inflation concerns, while high-risk cryptocurrency Bitcoin saw its price drop, data showed Wednesday.
On Tuesday, the price for a gram of gold rose 0.56 percent from the previous session to 68,200 won ($60.50) on the local bourse, maintaining an upward trend for the fourth consecutive day, according to the Korea Exchange.
The figure was the highest since it hit a record high of 68,320 won on Jan. 8, while gaining more than 10 percent from an all-time low of 62,300 recorded on Mar. 5.
Prices of gold, a key safe-haven asset, began to increase amid jitters over an economic recession stemming from the COVID-19 pandemic and subsequent inflation fears.
“Growing demand for gold, which can be a hedge against the risk of inflation or possible declines in the value of the dollar or other currencies, recently drove up its prices,” said Kim So-hyun, an analyst at Daishin Securities.
The current ultra-low rate climate also may have caused the price hike as prices of non-yielding bullion tend to gain when interest rates are low, she added.
Investors’ growing desire for a safe-haven alternative triggered a decline in virtual currencies.
Bitcoin, the world’s latest cryptocurrency, continued a downward trend since April 14, when its prices topped 80 million won per unit, to reach some 50 million won, as of Tuesday afternoon, according to local crypto exchange Upbit.
“Speculation has mounted since late last year that investors are expected to shift their attention from gold to Bitcoin, but it seems unlikely at this point. As of now, there is a low possibility that Bitcoin will function as a key safe-haven asset in the market just like gold does,” said Jeon Kyu-yeon, an analyst at Hana Financial Investment.
By Choi Jae-hee (email@example.com