From a long-term perspective, gold remains attractive, but it has been argued that there is a need to focus on silver, which is currently relatively overlooked.
According to DAISHIN SECURITIES on the 17th, recent gold prices have surpassed $2,900 per ounce, setting a record high. The real interest rate, which has an inverse correlation with gold prices, is slowing down in its rate of decline. Following the ceasefire between Israel and Hamas and the ongoing peace negotiations between Russia and Ukraine, the demand for safe-haven assets is retreating. Nonetheless, gold prices have risen.
The reason is concerns over tariffs imposed by U.S. President Donald Trump. This has led major fund companies in the U.S. to expedite the transfer of gold stored in overseas warehouses to the United States. A notable example is gold funds based in London's LBMA warehouses, where LBMA gold stocks have sharply decreased due to this transfer demand. The same applies to gold stored in other countries. At the end of January, gold stored in Indian bonded warehouses was moved to the U.S. American banks, capturing the rise in physical premiums and arbitrage opportunities before tariffs were imposed on gold, have driven the price increase.
Choi Jin-young, a researcher at DAISHIN SECURITIES, emphasized, "However, the price increase resulting from this has its limits." He stated, "As confirmed from 2017 to 2020, tariff threats are merely a negotiating tool for deals, not an objective," adding that "every time tariff exemptions are reached with various countries, the upper limit for gold prices is likely to be constrained."
At the same time, the researcher advised to pay attention to silver. He mentioned, "Despite being an inflation-hedging asset like gold, silver is excessively undervalued compared to the past," and "from a demand perspective, I am optimistic. In January, the expansion of domestic demand was prioritized in the Chinese local government meetings. Additional stimulus measures from China, the world's largest consumer of industrial metals, represent an attractive aspect for silver, which accounts for 60% of industrial demand."