The Financial Supervisory Service issued a "consumer alert" in connection with the domestic gold price having risen sharply compared with the international gold price. As the gap between domestic and international gold prices widens, the domestic gold price could fall rapidly, meaning investors should exercise caution.
The FSS said on the 17th that it issued a consumer alert, "caution," on financial products with gold as the underlying asset.
The underlying asset of gold investment products is divided into domestic and international gold prices. As of 16th, the domestic spot gold price was 218,000 won per g, up 69.3% from the start of the year, while the international gold price was 193,000 won, widening the price gap. The divergence rate between domestic and international gold prices is 13.2%.
According to the FSS, in the past five years there have been only two instances where the divergence rate between domestic and international gold prices exceeded 10%. In Feb., over about 30 trading days, the divergence rate widened to 22.6%, but over the following 18 trading days it narrowed to 0.7% through a downward adjustment. Recently, the divergence has been widening for about 21 days.
The FSS said, "The domestic gold price tends to converge to the international gold price on average," and noted, "When investing, you should check the divergence rate between domestic and international gold prices."
Gold prices can be checked through the Korea Exchange Information Data System and each securities firm's mobile trading system (MTS).