As gold prices surged sharply last year and investors snapped up spot gold exchange-traded funds (ETFs), the spot gold ETF balances held by major securities firms' individual clients were found to be nearing 3 trillion won.

As the Donald Trump administration launches an investigation into Federal Reserve Chair Jerome Powell, concerns grow over the Fed's independence and gold hits a record high. On the 12th (local time) on the New York Mercantile Exchange, the spot gold price broke above $4,600 per ounce and closed at $4,609.58, up 2.2% from the previous session. It surged to as high as $4,629.94 intraday, setting an all-time record. The photo shows gold products on display at Korea Gold Exchange in Jongno-gu, Seoul, on the afternoon of the 13th. /Courtesy of News1

Analyzing data received on the 19th from the office of Kim Sang-hun of the People Power Party, the amount of spot gold ETFs held in general accounts, individual savings accounts (ISA), individual retirement pensions (IRP), and retirement savings accounts at the top 10 securities firms (Daishin, Meritz, Mirae, Samsung, Shinhan, Kiwoom, Korea Investment & Securities Co., Hana, KB, NH) came to 299.31 billion won as of the end of last year.

Investors in particular concentrated on buying spot gold ETFs through general investment accounts. By account type, 48.05% of the total amount was concentrated in general accounts.

Notably, there was also a strong "gold-tech" boom through IRP and retirement savings accounts for old-age preparation. Of the total holdings, 37.97% was tied up in these pension accounts, while ISAs, which offer strong tax benefits, accounted for 13.98%.

Graphic=Jeong Seo-hee

Gold prices began a full-fledged surge last year. From the start of the year to the end, gold prices jumped a staggering 60%. As global geopolitical tensions intensified, a large influx of wealth moved into gold, the representative safe asset.

Domestic investors in particular focused on spot gold ETFs that allow easy investment in physical gold. There are currently two spot gold ETF products available domestically: the ACE KRX Gold Spot ETF first introduced in 2021 by Korea Investment Management, and the TIGER KRX Gold Spot ETF launched last year by Mirae Asset Management.

Recently, these ETFs each surpassed 4 trillion won and 1 trillion won in assets under management (AUM). The ACE KRX Gold Spot ETF's net assets were tallied at 4.1365 trillion won. This ETF surpassed 3 trillion won in net assets in Nov. last year, meaning it increased by 1 trillion won in about two months. The TIGER KRX Gold Spot ETF's net assets were also tallied at 1.15 trillion won.

Gold prices have continued to rise this year as well. The Korea Exchange (KRX) spot gold price stood at 221,930 won per gram on the day, up 6.29% from the start of the year.

Sim Su-bin, a Kiwoom Securities researcher, said, "As Iran's geopolitical risks have come to the fore and risk aversion toward safe assets has grown, the U.S. December consumer price index was released in line with market expectations," noting it was "the result of continued expectations that the U.S. Federal Reserve (Fed) will maintain a rate-cutting stance."

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