"I Thought Gold Would Easily Surpass 1 Million Won in a War"... 'Confusion' as Prices Fall

Cautious Sentiment Amid Concerns of Decline... Trading Slows Down

"Buyers Remain Careful Due to Perceived Peak Burden"

"There used to be a saying that whenever North Korea launched a missile, gold prices would jump. But now, even with a war breaking out, the price is actually falling."

Mr. Han (59), who has been running a gold and silver shop on the jewelry street of Donhwamun-ro in Jongno-gu, Seoul for 14 years, sighed as he looked around his quiet store. While the arrival of spring has brought more people out and about, the scene on the other side of the glass showcases at the gold shop was quite different. Mr. Jang (65), the owner of a nearby gold and silver store, also expressed his frustration, saying, "Even on Friday, customers were scarce all day," and added, "I've heard the exchange rate has surpassed 1,500 won—everyone seems to be flocking to the dollar."

On the afternoon of the 20th, inside a gold and silver shop located in the jewelry street of Donhwamun-ro, Jongno-gu, Seoul, a customer is examining gold products while an employee remains at their post. Photo by Hosoo Park

According to the Korea Gold Exchange on March 23, the price of one don (3.75g) of pure gold recorded 942,000 won, down 3.4% from the previous trading day. At the end of last month, gold prices had surpassed 1,050,000 won and, following the U.S. invasion of Iran on February 28, briefly exceeded 1,100,000 won amid heightened geopolitical uncertainty. However, as the middle of this month passed, those gains were completely erased, and prices fell below the 1,000,000 won mark.

Traders interviewed on-site said that since the war began, both buyers and sellers of gold have become highly cautious, each waiting for the other to make a move. Just two months ago, there was a frenzy of selling, with people even bringing in gold logos from old air conditioners or fragments of gold from outdated cell phones. However, this fervor has noticeably cooled since the U.S.-Iran war.

A gold and silver shop in Jongno-gu, which gained popularity on social media, had about five groups waiting in line, but even these customers were there to sell rather than to buy, hoping to offload their gold before prices dropped further. Normally, more than 50 groups would line up, with the shop closing registrations as soon as it opened, but recently, that level of activity has dwindled. Park (27), a staff member at the store, explained, "The major demand for large sums of money, like the Lunar New Year and the March tuition season, has already passed, and now those who want to sell are taking a wait-and-see approach, carefully watching market prices. The enthusiasm for buying has clearly died down."

Gwak (58), who visited a gold and silver shop that day, said, "I thought that with the war premium, the price of gold would easily surpass 1,000,000 won per don, but as it keeps falling, I feel bewildered. I came out early in the morning to sell before taking any more losses."

On the 20th, citizens visiting a gold and silver shop on Donhwamun-ro in Jongno-gu, Seoul, are waiting in line to sell gold. As gold prices have recently been declining, demand is surging from those seeking to sell before prices drop further. Photo by Hosoo Park

Those who invested in financial products rather than physical gold are also reportedly feeling a significant sense of dismay. Kwon (42), an office worker, said, "I invested in a gold exchange-traded fund (ETF) because it was supposed to be a safe asset, but was shocked to see the weekly decline exceed 7%. The drop in silver prices was even worse," he added, shaking his head.

Yang Junmo, a professor of economics at Yonsei University, identified "excessive highs" as the main reason for the decline in gold prices. Professor Yang explained, "The fact that gold prices have climbed so much has itself become a negative factor for the market. Even if prices have soared sharply in the past, if expectations for future returns diminish, investors will choose to sell. Right now is precisely the point where gold is losing its appeal as an asset."

The international gold market reflects this trend as well. According to the New York Mercantile Exchange (COMEX), from February 27 to March 20, gold futures prices fell by 12.8%, while silver futures prices dropped by 25.3%. Kang Insu, professor of economics at Sookmyung Women's University, analyzed, "The market is currently more sensitive to inflation and monetary policy directions than to the war itself. As the dollar has overtaken gold as the 'last bastion,' we are witnessing a reversal in capital flows."

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