Japan is seeing a boom in gold investment amid heightening concerns over a global economic slowdown caused by U.S. President Donald Trump’s hefty tariffs, as investors seek a safe asset seen as unlikely to plummet in the event of turbulence.
The benchmark price of gold set by Tokyo’s Tanaka Precious Metal Technologies Co. hit an all-time high in yen terms on April 22, exceeding 17,000 yen ($115) and surging around 15 percent in the three months since Trump took office on Jan. 20.
Products linked to gold price movements have also become popular among investment trusts covered by Japan’s tax exemption program for private investors, known as NISA, while more people have started monthly investments in pure gold.
File photo shows 1-kilogram bars of gold bullion at a store in Tokyo. (Kyodo) ==Kyodo
Among investment trusts, the inflows to the Mitsubishi UFJ fine gold fund that reflects gold prices totaled some 19.2 billion yen in March, up by about 2.6-fold from last December.
The fund ranked fourth last December in investment trusts under the NISA program in terms of value handled by PayPay Securities Corp. but topped the ranking in February and placed second in the following month, it said.
At Tanaka Precious Metal, the number of people who purchased bullion and coins increased, while the number of its members investing in pure gold at fixed monthly values expanded 26 percent in the January-April period from a year earlier, it said.
Used gold accessories are also becoming popular. At major second-hand luxury brand goods seller Komehyo Co., sales of gold products including accessories in March climbed 30 percent from a year earlier.
In Tokyo’s Shinjuku district, one of its outlets sells a wide selection of products from gold necklaces and gold pendants, with price ranging from hundreds of thousands to millions of yen.
“They are mainly sold to customers in their 30s to 40s,” the store’s sales manager said.
Gold also has the risk of price declines like other assets but its prices have been solid at a time when the stock market has been volatile, with the Nikkei benchmark suffering its third-largest point drop in history on April 7.
“Considering the volatility in the stock market, gold continues to remain an attractive investment destination,” said Atsuko Sato Whitehouse, head of the Japanese market at BullionVault.
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AloJapan.com