"Buy While It's Cheap" Gold Rush in Gold Account Sales

March Gold Banking Cumulative Sales Weight
Increased by 11.4% Compared to December Last Year

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] As gold prices hit record lows day after day, the number of customers seeking gold-related products is increasing. This is attributed to demand driven by the desire to buy gold, a representative safe asset, while it is cheap amid heightened stock market volatility and concerns over rising interest rates.

According to banks on the 11th, as of the 9th, the cumulative sales weight of Gold Banking (gold accounts) handled by KB Kookmin, Shinhan, and Woori Bank reached 10,036 kg. This is an 11.4% surge compared to 9,010 kg in December last year.

The popularity of gold accounts, which had been steady since the beginning of this year, has soared even higher this month. The cumulative sales weight increased by 228 kg from 9,587 kg in January to 9,815 kg in February, but in March, it rose by 221 kg over six business days as of the 9th, nearly matching the total cumulative amount of the previous month.

Gold accounts are gaining attention as a representative indirect gold investment product that allows easy investment. When you deposit money into your account, the balance automatically fluctuates according to international gold prices. It offers the advantage of enabling gold investment with a small amount and the ability to redeem at any time. Transaction fees are also around 2%, which is cheaper than buying gold bars. Because of this, despite transaction fees and a 15.4% dividend income tax, gold accounts remain popular.

Customers are also flocking to gold bars favored by wealthy investors. At KB Kookmin, Hana, and Woori Banks, which handle gold bars, 60.6 kg were sold just in the first nine days of this month. This surpasses the sales record of 51 kg in December last year and is more than half of the sales volume in February (117.1 kg) and January (101.7 kg).

A banking official explained, "Recently, as risky assets have generally been on a downward trend, demand for safe assets has increased. Concerns about inflation are also growing, so demand for gold as a hedge remains steady."

The price of gold, a safe asset, is falling, reflecting the sentiment of "buy when cheap." On the 8th, gold traded on the New York Mercantile Exchange fell 1.19% ($20.30) to $1,677.70 per troy ounce compared to the previous day. This is a 14% drop from $1,952.70 per troy ounce at the beginning of the year. Compared to the surge to $2,051.7 in August last year, the decline amounts to 20%.

The decline in gold prices can also be seen in the decrease in the cumulative balance of gold accounts. The cumulative balance of gold accounts, which recorded 596.6 billion KRW in December last year, was 632.7 billion KRW in January, 621.9 billion KRW in February, and 618.9 billion KRW as of the 9th. Although the cumulative sales weight increased, the cumulative balance decreased due to the drop in gold prices.

This content was produced with the assistance of AI translation services.