On October 8, 2026, domestic gold prices in South Korea showed pure gold holding steady, while platinum and silver prices declined.

According to domestic gold prices released that day by GoldPrice.com (Geumsise.com), pure gold (24K) was quoted at 776,000 won for purchase and 685,000 won for sale per don (3.75g). Both the buying and selling prices were unchanged from the previous day.

The 18K gold price stood at 506,000 won per don (3.75g) for sale, and the 14K gold price at 393,000 won for sale, also unchanged from the previous day.

In contrast, platinum fell by 5,000 won to 308,000 won for purchase and by 7,000 won to 253,000 won for sale per don. Silver also dropped 100 won on both sides, to 10,550 won for purchase and 9,850 won for sale.

Why the 'Gold Rises on Uncertainty' Formula Is Not Working

International gold prices are typically traded in dollars. When the dollar strengthens, investors using other currencies such as the euro, yen, or yuan must pay more to buy the same amount of gold, meaning a strong dollar can slow global gold demand.

For this reason, the international gold market is difficult to explain by the formula 'gold rises when things are uncertain' alone. Even if demand for safe assets strengthens, a simultaneous rise in Treasury yields and the dollar can actually create selling pressure on gold. In particular, if markets begin to price in reduced expectations of Federal Reserve rate cuts or the possibility of rates staying higher for longer, this can place a significant burden on gold prices.

The key variable is the real interest rate. The real rate—nominal Treasury yields minus expected inflation—has shown a close relationship with gold prices. When real rates rise, the opportunity cost of holding gold tends to increase; conversely, when real rates fall or turn negative, gold often regains its relative appeal.

This is why markets react sensitively to U.S. inflation trends and the Federal Reserve's future policy path. Markets pay more attention to how long high rates will be maintained than to what the benchmark rate currently is. The stronger the perception that the Fed will not rush to cut rates, the less easily long-term Treasury yields come down, which in turn weighs on gold. Conversely, if signs of economic slowdown become clear or inflation pressures ease quickly, boosting expectations of a dovish Fed pivot, buying flows could return to the gold market amid falling Treasury yields and a weaker dollar.

Central Bank Gold Purchases... Long-Term Demand Is a Separate Trend

The medium- to long-term environment surrounding gold is also not simple. While high rates and a strong dollar pose short-term burdens, central bank gold purchases and global fiscal uncertainty are cited as factors supporting gold's long-term demand base. Moves by central banks around the world to diversify part of their foreign reserves into gold are regarded as a structural change in the international gold market.

If countries seeking to reduce the share of dollar assets steadily incorporate gold, long-term demand can be maintained regardless of short-term price corrections. This differs from the past, when the gold market was relatively more influenced by individual investors and private capital flows. Central banks often prioritize the stability of their foreign reserves and asset diversification over short-term price movements, so their purchases can provide a degree of downside support for the gold market.

However, strong central bank demand does not mean gold prices always rise. In a phase of sharply rising rates, short-term capital flows can move prices more powerfully than the long-term demand of central bank purchases—and the current market phase is close to that case.

The Meaning of Stocks and Gold Falling Together

The fact that stocks and gold weakened simultaneously suggests investors did not simply move from risky assets to safe assets. Rather than funds flowing directly from stocks into gold, they may have moved into other assets such as cash, dollars, or bonds. This indicates that risk aversion in the market is taking the form of 'asset reallocation due to high rates' rather than 'fear-driven gold buying.'

Interest rates raise companies' funding costs and the discount rate for equities, while also increasing the opportunity cost of gold. This is why an unusual pattern of stocks and gold coming under pressure simultaneously can appear during periods of rising rates.

Earlier, on October 7 (local time), the New York stock market showed a similar structure. The Dow fell 0.66%, while the S&P 500 and the Nasdaq each dropped 0.22%. As tech and growth stocks are sensitive to high rates, if the rise in Treasury yields continues, further valuation adjustments are also being discussed as a possibility.

Future Variables for Gold... Treasury Yields, Inflation, Investor Sentiment

In the gold market, how quickly Treasury yields stabilize can be seen as the key variable determining the future direction. If Treasury yields come down from their highs and dollar strength eases, gold could regain safe-haven demand, but if rates stay high for an extended period, the speed of gold's rebound could also be limited.

Changes in investor sentiment are also worth watching. When gold prices have risen for a long time and sit near their highs, short-term investors may move to lock in profits even on small negative news. If a clear selling pretext emerges, such as rising Treasury yields, profit-taking could expand quickly; conversely, if prices correct to a certain level, bargain-hunting by long-term investors could flow in.

Therefore, the current gold market should be viewed not simply as bullish or bearish, but as a phase where long-term safe-asset demand collides with short-term high-rate pressures. Upcoming U.S. inflation and employment indicators and remarks by Fed officials could significantly influence the gold market. If inflation comes in higher than expected, expectations for Fed rate cuts would weaken, potentially pushing Treasury yields and the dollar back up, while if inflation stabilizes quickly or the job market slows noticeably, rate-cut expectations could revive, creating conditions for a gold rebound.

The Key Question: 'Which Safe Asset Is More Attractive?'

In international financial markets, gold is not a mere commodity. It is an inflation hedge and a safe asset, while also being a financial asset strongly influenced by the dollar and interest rates. Even with the same market uncertainty, gold's reaction differs depending on the cause. When anxiety about credit itself grows—such as during wars or financial system crises—gold demand can rise quickly, but when rising Treasury yields are the key variable, as now, the burden of high rates can weigh on gold more heavily than safe-asset preference.

Ultimately, the most important question in the gold market on the morning of October 8 is not 'is gold a safe asset,' but 'which asset among safe assets is more attractive.' If U.S. Treasuries offer high yields and the dollar remains strong, gold can lose ground in relative competition. Conversely, if Treasury yields fall and the dollar weakens, gold's appeal can quickly revive.

The simultaneous decline of the New York stock market and the gold market on October 7 (local time) can be understood in this context. In the stock market, high rates increased valuation burdens; in the gold market, high rates raised the opportunity cost of a non-interest-bearing asset. Though they are different assets, both were affected by the same variable.

[This article is for informational purposes only regarding investment; investment decisions and any resulting responsibility rest with the investor.]