Investors Flock to Gold as Martial Law Declared

Following the government's declaration of martial law on December 3, the domestic gold price experienced a notable surge as investors sought a stable store of value amid political uncertainty. By December 11, the price had risen to over 124,000 won per gram, marking a steady increase from the initial 120,000 won per gram on the day of the declaration.

Gold Investments Skyrocket

Historically, martial law declarations have been associated with heightened political instability and restrictions on civil liberties, prompting a shift towards safe-haven assets like gold. This trend was evident as investment inflow into gold reached 51.1 billion won over six trading days, according to the Korea Exchange.

Gold Bar Sales Surge

The surge in gold investments was mirrored in the sales of gold bars handled by the five major banks. Sales exceeded 1.015 billion won on December 4, followed by 98.9 million won on December 5, 1.335 billion won on December 6, and a remarkable 1.617 billion won on December 9. The balance of gold banking accounts at three major commercial banks also saw a significant increase, standing at 753.9 billion won on December 9, up by 9.1 million won from the beginning of the month.

ETF Performance Reflects Growing Confidence in Gold

The ACE KRX Gold Spot ETF experienced a notable rise, increasing by 4.14% from 17,035 won just before the martial law declaration to 17,740 won on December 11. The net asset value of this ETF has surged nearly fivefold compared to the end of last year, highlighting the growing investor confidence in gold as a stable store of value during times of economic and political volatility.