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Gold-related funds gather pace on weaker dollar

All Headlines 09:27 February 03, 2017

SEOUL, Feb. 3 (Yonhap) -- Gold-related funds here have regained momentum in recent weeks, returning over 6 percent, as the U.S. dollar has weakened after a months-long rally, data showed Friday.

Those funds posted an average of 6.41 percent gains in January, reversing a three-month loss of 4.96 percent, according to the Korea Exchange and financial information provider FnGuide.

Gold prices soared 4.5 percent on-month to US$1,200.50 an ounce at the end of January, they said. The prices jumped to $1,216.80 on Jan. 23.

Analysts expect a further rise, saying the dollar will likely continue to lose ground.

"Among the factors to weaken the dollar are the U.S. burden for the strengthening of the dollar and its perception that China, Japan, Germany and other trade partners have intervened in the foreign exchange rate issue," said Lim Dong-min, a Kyobo Securities researcher.

Gold bars in storage. (Yonhap)

Leaving the short-term interest rates unchanged in a meeting held earlier this week, the Fed offered no clue to the speed of its rate increases.

Uncertainty over U.S. President Donald Trump's foreign trade policies has also whetted investors' appetite for risk-off assets. Touting his trademark "America First" policy, Trump has signaled a full-scale trade war, a move expected to lead the dollar to weaken further.

Usually, the value of the dollar and the price of gold move in the opposition direction.

lcd@yna.co.kr
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