Gold Investment Exceeds 1.5 Trillion Won Amid Global Turmoil

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Surge in Gold Investments Amid Rising Prices

As international gold prices continue to climb, investments in gold have experienced a significant surge. This has led to an increase in the balance of "gold banking" accounts—specialized bank accounts that allow individuals to purchase and sell gold in increments as small as 0.01 grams. These accounts now hold over 1.5 trillion Korean won, marking a notable milestone in the financial sector.

According to reports from the banking industry on the 12th, the total balances of gold banking accounts at KB Kookmin, Shinhan, and Woori Bank reached 1.513 trillion won. The figures for KB Kookmin and Shinhan are as of the 9th, while Woori Bank's data is as of the 2nd. This represents a near-doubling compared to the end of last year, when the total was 782.2 billion won, and it also marks a record high. Additionally, the balance increased by nearly 100 billion won from the end of last month, which stood at 1.4171 trillion won.

Gold banking allows users to engage in transactions involving gold in very small units. By depositing funds into these accounts, individuals can purchase gold at international market prices. When they withdraw, the gold is sold at current rates, with the proceeds returned in Korean won.

Increased Sales of Gold Bars

In addition to the rise in gold banking balances, sales of gold bars at banks have also seen a sharp increase. From January to September, the five major banks—including KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—sold 450.5 billion won worth of gold bars. This far exceeds last year’s total sales of 165.4 billion won. In February and March, gold bars were sold out, leading to temporary halts in sales. During the first two days of this month, gold bar sales reached 13.487 billion won, with a daily average (based on business days) of 6.7 billion won. This is a significant increase compared to last month’s average of 5.1 billion won.

Factors Driving the Gold Investment Trend

The increase in international gold prices is attributed to growing market uncertainty. Factors such as a weakening U.S. dollar, a U.S. federal government shutdown, and U.S.-China trade tensions have driven investors toward safe assets. A trend known as "debasement trade"—where investors opt to buy gold instead of dollars—has gained traction in U.S. financial circles, further boosting gold investments.

On the 7th, the international spot price of gold surpassed $4,000 per troy ounce (approximately 31.1 grams), marking a historic milestone. Domestically, as of the 11th, the price of one "don" (3.75 grams) of gold reached 819,000 won. This is an increase of 110,000 won from a month ago, when the price was 709,000 won. After a sharp decline following news of a Gaza ceasefire agreement, gold prices resumed their upward trend amid escalating U.S.-China tensions.

Conclusion

The surge in gold investments highlights a shift in investor behavior, driven by economic uncertainties and the pursuit of stable assets. As gold banking accounts and gold bar sales continue to grow, it is evident that gold remains a key player in the current financial landscape. With international prices reaching new heights, the demand for gold is expected to remain strong in the coming months.

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