According to the Korea Gold Exchange on September 23, the domestic gold price for pure gold (24K, 3.75g) was recorded at 834,000 won for buying and 702,000 won for selling. The buying price of pure gold fell 2,000 won, down 0.24% from the previous day, while the selling price remained unchanged at 702,000 won.

The 18K gold selling price stood at 516,000 won and the 14K selling price at 400,200 won, both unchanged from the previous day.

Platinum (3.75g) was recorded at 346,000 won for buying and 281,000 won for selling. The buying price rose 6,000 won, up 1.73% from the previous day, and the selling price jumped 5,000 won, up 1.78%. Silver (3.75g) was recorded at 12,270 won for buying and 10,210 won for selling. The buying price rose 150 won, up 1.22% from the previous day, while the selling price rose 130 won, up 1.27%.

■ Two Forces Moving Gold Prices: Geopolitical Risk and U.S. Interest Rates

For thousands of years, gold has repeatedly returned to the center of markets whenever wars, financial crises, or changes in monetary order occurred. It was used as a means of preserving wealth even before currency took its current form, and in modern times it has taken its place as a reserve asset of central banks.

Recently, this gold has been seeking its price direction between two different forces: geopolitical risks in the Middle East and high U.S. interest rates. Expectations that high U.S. rates could persist for a long time and the movement of the dollar are pressuring prices from the other side. In particular, the higher market rates remain, the greater the relative opportunity cost of holding gold. This is one of the reasons gold prices do not move in one direction simply because geopolitical risk emerges.

The relationship between gold and international affairs has a long history. In past wars between nations, how much gold and silver a country could secure and move was tied to its fiscal capacity. The London Bullion Market Association (LBMA) also explains that since the 15th century, in the process of wars and the formation of the international financial order, the procurement and movement of precious metals influenced national economies and financial systems.

In the 20th century, gold's role became further institutionalized. Passing through the gold standard era and the creation of the Bretton Woods system, the link between gold and the dollar became a crucial pillar supporting the international monetary order. Although the system of directly exchanging dollars for gold later came to an end, gold itself did not exit financial markets. Central banks held gold as part of their reserves, and every time a shock hit financial markets, gold was again highlighted as a representative safe asset.

■ Middle East Situation and Oil Prices: Two-Way Variables for Gold Prices

The recent Middle East situation is also retesting these longstanding properties of gold. U.S. President Donald Trump evaluated his roughly three-hour talks with the Iranian side as productive, mentioning the possibility of further contact. When signals emerged that a channel of dialogue had opened between the United States and Iran, the oil market also reacted. November Brent crude fell to $99.25 per barrel, closing trading below the $100 mark.

Easing Middle East tensions and falling international oil prices are variables that are difficult to classify as simply good or bad news for the gold market. If concerns about military conflict diminish, demand for gold as a risk-hedge may weaken. On the other hand, if oil prices stabilize, some of the pressure pushing up U.S. inflation may also ease. If inflation burdens ease, market judgments about the necessity for the Federal Reserve to maintain high rates for an extended period could change, which could act as a force in the opposite direction on gold prices.

The same applies if Middle East tensions rise again. War risk itself is a factor that drives demand for gold as a safe asset, but if international oil prices surge due to supply concerns, inflation pressure could strengthen again. In this case, gold-buying factors from geopolitical risk and selling factors from rate-hike concerns appear simultaneously.

■ Gold Seeks Equilibrium in the $4,300 Range

This year's trajectory of gold prices reflects such a complex environment. Spot gold rose to $5,594.82 per ounce in January, setting a record high, but subsequently underwent a sharp correction, with the current price more than 20% below that peak.

The environment surrounding the gold market has also changed from the past. It is difficult to explain all recent price movements by looking only at wars or financial market anxiety. This is because Middle East developments and international oil prices, as well as U.S. Treasury yields, the dollar's value, and Fed monetary policy expectations, are all being reflected in prices simultaneously.

The trend of the New York stock market is also noteworthy. As funds flocked back to technology stocks centered on artificial intelligence (AI) and semiconductors, the Nasdaq repeatedly set new records, but the Dow and S&P 500 did not move in the same direction. Rather than the market as a whole moving into risk assets at once, it was a flow closer to selective risk appetite, with funds concentrating in specific growth industries.

In this environment, gold is seeking a new equilibrium centered around the $4,300 range. Whether U.S.-Iran negotiations progress, further movements in international oil prices, U.S. rate expectations, and the dollar's direction remain key variables that will determine gold prices going forward.

From an ancient means of exchange, through the gold standard and the Bretton Woods system, to a reserve asset of modern central banks, the form and role of gold have constantly changed. Yet when uncertainty grows, the market's gaze upon gold has not easily disappeared. Today's gold price in the $4,300 range likewise sits in the process of the old geopolitical variable of the Middle East and the variable of interest rates in modern financial markets being reflected simultaneously in the price tag.

[This article is for reference only for making investment decisions and is not intended to solicit investment. Responsibility for investments lies with the investor.]