Big Investors Shocked by Market Crash, Stockpile Gold Bars

Bank VIP Asset Holders Inquire About Gold Bar Savings Accounts
Sales of Bank Gold Products Have Been Increasing for 3 Months
Experts Say "For Inflation Hedge, Gold Prices Will Rise Further"

[Asia Economy Reporter Sim Nayoung] On the 24th, Dr. Kim (51), who runs a private clinic in Seocho-dong, Seoul, asked the VIP manager of his regular bank branch about investing in gold. Kim, who usually invested only in real estate, said he wanted to put all 1.2 billion KRW in his demand deposit account into gold. "Seeing the stock market plunge like a roller coaster, I don't trust investment products. These days, gold seems to be the right answer," Kim said. The VIP manager showed him a gold account (Gold Banking) product. Nodding, Kim has recently been checking gold prices himself and is currently purchasing 1.2 billion KRW worth of gold in installments via mobile banking.

As stocks and cryptocurrencies have plunged, wealthy investors are showing interest in gold. This year, gold prices have continued to rise, leading to increased inquiries and subscriptions for gold accounts and gold bar products among VIP customers. A bank official selling gold products said, "Although the rising gold price has increased the cost burden, many VIP customers want to invest in physical assets going forward," adding, "Three days ago, a small and medium-sized enterprise owner holding about 5 billion KRW in cash assets revised his asset portfolio by investing 1 billion KRW, which was redeemed from index funds at the end of last year, into gold."

The upward trend in gold product investments began about three months ago when signs of a stock market decline appeared. According to banks on the 28th, the balance of gold account deposits at major banks such as Shinhan Bank, Woori Bank, and Kookmin Bank was 698.3 billion KRW (as of the 26th), an increase of 19 billion KRW from 679.3 billion KRW at the end of November three months ago. Gold accounts are one of the indirect gold investment methods, allowing customers to trade gold in units of 0.01g by opening an account, unlike directly purchasing gold bars. A key feature is tax savings. When a profit is realized later, only 15.4% of the difference is paid as dividend income tax, reducing the tax burden.

Gold bars, which require paying 10% VAT on the purchase amount, are also held by wealthy investors. Bank A, which discloses gold bar sales, reported a vertical increase from 78 billion KRW in November and 93.1 billion KRW in December to 136.2 billion KRW as of the 26th. The increase in gold product sales at commercial banks is also related to the rise in gold prices. According to Kookmin Bank's data on the 28th, the gold price was 70,220 KRW per gram, up 939 KRW from 69,281 KRW at the end of November. Compared to the end of January last year (67,038 KRW), this is a 4.75% increase.

Experts believe interest in gold investment will grow further. This is due to the combined effects of the financial market downturn, global inflation, and economic recession. Kim Hyunseop, head of Kookmin Bank Hannam PB Center, explained, "Gold is a physical asset and one of the few investment options at a time when currency value is sharply declining," adding, "Rather than expecting short-term gains like stocks, it is advisable to look at a 3- to 5-year horizon and diversify investments."

The overseas financial market also views gold investment prospects positively. Goldman Sachs, in a report on the 26th, stated, "This year, demand for safe assets for inflation hedging is increasing," and forecasted that "gold prices could rebound significantly," raising the 12-month gold price forecast from $2,000 to $2,150.

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