<Anchor> This is a
friendly economic time. Today (27th), I will be with reporter Han Ji-yeon. Today's topic is gold.
<Reporter>
Yes, it is gold. At the beginning of this year, when I went to the Jongno 3-ga Geum-Geumbang, and recently, there were very few customers.
The number of marriages has decreased due to the corona virus, and it is not common to buy accessories in gold and silver rooms these days.
This is because the preference for gold, which is a safe asset, has increased as the insecurity has increased due to the corona virus. It is said that gold bars are particularly popular among young people these days as wedding gifts.
It's a kind of 'gold tech'. It has dropped a bit now, but in August of last year, there was a time when it was close to 80 million won for a 1kg gold bar.
If you change the unit to money, it is currently about 298,000 won, which is close to 300,000 won when you buy gold. It has increased by 10% compared to the previous year. Compared to the end of 2019, before the corona outbreak, it has risen by 35% in two years.
<Anchor> The
reason the price rises so much is that there are a lot of people looking for it, but you say that the world's central banks are also buying and collecting a lot of gold?
<Reporter> The
World Gold Association has
published a
document that states that central banks around the world are buying gold instead of US dollars as foreign currency reserve assets.
Gold reserves have increased by 4,500 tons in the last 10 years. So now it is 36,000 tons, which is 15% more than 10 years ago. This is the highest level in 31 years since 1990.
In the case of Poland, it bought about 100 tons of gold in 2019, the year before. Hungary has tripled its gold reserves to 90 tonnes this spring. Thailand, India and Brazil also bought dozens of tons of gold by September this year.
Even if you consider the proportion of central banks and public institutions in the global gold demand market, it has surged 8 times in 10 years. As a result, the share of the dollar as a foreign currency reserve asset fell to the lowest level in 25 years last year.
<Anchor>
Why do central banks around the world buy gold, according to the Japanese Nikkei Shimbun analysis results?
<Reporter> The
main reason is the fall in the value of the dollar. This is how I analyzed it. As the dollar continued to use large-scale monetary easing, the dollar loosened a lot, and as a result, its value fell.
If we go back a little further, when paper money came into existence, this value was measured in terms of gold, which had previously been used as currency.
For example, 1 won of money is how many grams of gold. In this way. This is called the 'gold standard', but during World War I, each country needed a lot of money, so they printed a lot of money.
Since gold could not be mined that much, many countries abolished the gold standard system. After the United States abolished it in 1971, the money supply increased 30 times in the next 50 years. As a result, the value fell to 50%.
In 2008, confidence in the dollar was shaken by the Lehman shock. When the global financial crisis came, the use of financial easing measures would have caused the dollar to depreciate further.
I think the time when the central bank's gold reserves started to increase was around 2009, around this time, and countries with weak credit are buying and collecting gold, saying, 'It is more gold than dollars' for asset preservation. It is expected that this will continue next year as well.
The US Federal Reserve will end quantitative easing and raise interest rates. Although this has been done, the analysis is that it will not be easy to suddenly reduce liquidity.
<Anchor>
Then there is a lot of demand for gold in the general market and central banks are also in high demand due to the weak dollar, as I just said.
<Reporter>
The price of gold has been rising recently. Although the US Federal Reserve said it would tighten policy, the spot gold price was up 2% on the 24th from before the announcement.
The stock market is not doing well these days, but with gold prices rising, the first to third places in overseas side yields last week were all related to gold. Also recently, Bloomberg reported that "international gold prices will rise to $3,000 in a few months." I also looked at it this way.
You said the Fed will raise interest rates at least three times next year.
During this time, volatility increases.
In the asset market next year, depending on the two movements of inflation and interest rates, it seems that product returns will be very different.
Invest in performance-oriented investment products, but it is good to have 20-30% of these safe assets such as gold.
Also, experts advise to use indirect investment products well to use risk aversion strategies.