Connect to share and comment
SEOUL, April 23 (Yonhap) -- South Korea's gold bourse is drawing a weaker-than-expected attention from investors, with a turnover staying well below what authorities anticipated one month after its opening, data showed on Wednesday.
The gold bourse was launched on March 24 as the country struggles to bring the unregulated market into the open as well as broaden its taxation base.
The data compiled by the Korea Exchange (KRX), the gold bourse operator, show the daily turnover has averaged 3.6 kilograms per day, lower than the hoped-for amount of some 10 kg. The cumulative value of gold traded came in at 3.52 billion won (US$3.38 million), according to the data.
Given that some 30 kg of gold are traded a day by private dealers, the gold bourse's performance is disappointing.
"The turnover is weak at the moment, but we expect a steady rise given its convenience for trading and price merit," said the KRX.
The operator said it would redouble efforts to vitalize the gold bourse and set up a transparent and fair trading system.
South Koreans hold an estimated 720 tons of gold, seven times the 104 tons kept at the central bank, and gold trading volume reaches some 100 tons on an annual basis, about 70 percent of which is believed to be traded illegally to avoid taxes.
The data showed retail investors accounted for 51 percent of total trading. The KRX said it would consider introducing additional measures to woo more dealers, wholesalers and registered members into actively participating in the trading.
Currently, nine securities firms and 56 dealers, importers and wholesalers are registered as members of the bourse, the KRX said.
Analysts said the gold bourse was less popular among investors who were chasing after risky assets such as stocks rather than safer ones like gold.
Also, a slump in gold prices has also held them at bay, according to the analysts. In 2013, the gold prices plunged some 28 percent, ending a 12-year bull run. The gold price is expected to stay between $1,200 and $1,300 an ounce this year, little changed from last year's levels, as a recovery in the U.S. economy and the strengthening U.S. dollar would limit the gains.
<All rights reserved by Yonhap News Agency>
Copyright Yonhap News Agency, 2014. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.