[Edaily Kim Kyung-eun Reporter] As gold prices have rebounded sharply, related exchange-traded funds (ETFs) are also continuing their upward trend in returns. This is due to funds flowing into gold as the dollar weakens amid U.S. fiscal uncertainty. In the securities industry, views are divided: some predict that gold will rise further as it emerges as a safe-haven asset替代 U.S. Treasury bonds, while others believe that high interest rates driven by inflation will limit its upside potential.

According to Koscom’s ETF Check on the 25th, the “HANARO Global Gold Mining Companies” ETF posted a return of 10.02% over the past week, ranking third among domestically listed ETFs in terms of returns. Its one-month return of 30.31% also placed it third overall.

This ETF invests in global gold mining companies such as Newmont, Agnico Eagle Mines, and Barrick Mining. Investors can expect the effect of operating leverage, whereby mining companies’ profits increase at a faster rate when gold prices rise.

Over the past week: △KODEX Gold Futures (H) (8th place, 5.40% return) △TIGER Gold Futures (H) (9th place, 5.24%) △TIGER Gold & Silver Futures (H) (11th place, 5.06%) △TIGER KRX Gold Spot (14th place, 4.28%) △ACE KRX Gold Spot (17th place, 4.16%) also ranked among the top performers.

The strong performance of gold-related ETFs is driven by the rapid rebound in international gold prices. The spot price of gold, which had risen to $5,595 per ounce during trading in late January, fell by approximately 29% to $4,009 by the end of June. It began to rebound in July and has now recovered to the $4,600 level.

In particular, an unusual phenomenon has recently emerged in which gold prices are rising even as U.S. long-term Treasury yields climb. Generally, interest rates move in the opposite direction of gold prices. This is because when interest rates rise, bonds—which pay interest—become more attractive, reducing the incentive to hold gold, which does not pay interest.

However, this formula has been shaken recently as the U.S. fiscal burden has grown. As the U.S. government has significantly increased its debt, investors seeking to purchase long-term Treasury bonds are demanding higher interest rates. Consequently, even during an economic downturn, long-term Treasury yields are not falling as sharply as they used to, and the effect of rising Treasury prices in offsetting investment losses has also weakened.

Ultimately, while in the past, a decline in stock prices was offset by a rise in Treasury bond prices—thereby acting as a hedge against losses—analysts note that, with confidence in U.S. Treasuries waning recently, gold is now partially filling that role.

Forecasts from the securities industry regarding future gold prices are mixed. The U.S. budget deficit, policy uncertainty, and gold purchases by global central banks driven by rising term premiums on long-term Treasury bonds are expected to support the upward trend in gold prices. NH Investment & Securities forecasts that gold prices will surpass the $5,000-per-ounce mark again within the year and reach a new all-time high next year.

Hwang Byung-jin, an analyst at NH Investment & Securities, “With the probability of a September interest rate hike diminishing due to weaker-than-expected U.S. economic indicators, the U.S. Treasury’s expansion of long-term bond buybacks is actually highlighting the massive fiscal deficit and policy uncertainty,” adding, “The undervalued appeal of gold prices—which have already factored in the possibility of about 50 basis points (1 bp = 0.01 percentage point) of tightening—is drawing attention.”

However, analysts suggest that structural inflationary pressures could cap the upside for gold prices. This is because energy prices are likely to remain high as supply chain disruptions in the Middle East persist. The longer interest rates remain at elevated levels, the greater the opportunity cost of holding gold, which pays no interest.

Choi Jin-young, an analyst at Daishin Securities, said, “I am skeptical about the possibility of gold prices surpassing the year’s high of $5,600 per ounce,” explaining, “This is because there is a possibility of energy-driven inflation stemming from supply chain disruptions in the Middle East.” He added, “China, the world’s factory, is also a concern,” predicting, “As China faces difficulties securing low-cost crude oil from Iran and Russia, pressure to raise production costs could intensify, which could lead to inflation in countries that import Chinese products.”

Ultimately, whether gold prices will rise further is expected to depend on the direction of U.S. inflation and interest rates. Yuanta Securities projected that under the base-case scenario—in which the benchmark interest rate remains unchanged this year and is cut up to twice next year—gold prices will stabilize around the $4,500 level, and as rate cuts become more likely, there will be significant room for further gains. Conversely, if inflation rises again and interest rate hikes become a reality, gold prices could correct to the $3,800–$4,400 range.