The price of gold on South Korea’s bourse reached the highest level in three years this week, reflecting the market’s preference for risk-free assets amid persistent volatility, data showed Thursday.

According to the Korea Exchange Gold Market, the price of gold closed at 50,430 won ($42.80) per gram Wednesday, down 30 won from the previous day’s close but up 9.06 percent from the beginning of the year.

Tuesday’s closing price of 50,460 won per gram marked the highest since the 50,500 won observed on July 8, 2016, in the aftermath of the Brexit decision and its impact on the global financial market.

The volume of transactions also remained in a steep uptrend, reaching 557 kilograms in May, the highest since August last year, data showed.

The popularity of gold as an investment reflected the preference for risk-free assets amid uncertainties caused by the escalating US-China trade conflict, according to experts.

“The gold price will remain in an uptrend for a while, unless (the US and China) find a groundbreaking clue to their trade tension,” said Kim So-hyun, an analyst at Daeshin Securities.

Also, the latest dovish gesture by the US Federal Reserve that it may consider a rate cut has further encouraged investors to turn to gold, according to the KRX Gold Market.

Some observers, however, suggested that the gold market rush may soon subside as the world’s two largest economies show signs of reconciliation.

“There is some expectation on a dramatic settlement as US President Donald Trump mentioned the possibility of meeting with Chinese counterpart Xi Jinping at the Group of 20 summit later this month,” said Seo Sang-young of Kiwoon Securities.

“Once the trade-related uncertainties are resolved, the avoidance of risk assets will also decrease to a certain extent.”

By Bae Hyun-jung (tellme@heraldcorp.com)