"I Get Tired of Rings, But Gold Bars Feel Secure"... Gold Exchange Craze Amid Soaring Gold Prices

"If you bring in 10 don of first birthday rings, the analysis fee is 60,000 won, the processing fee for the gold bar is 30,000 won, so you can take home a gold bar for a total of 90,000 won."

Yonhap News

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On September 21, at a jewelry store in the jewelry district of Jongno-gu, Seoul, a "gold exchange" was taking place. Customers were exchanging gold items from home, such as first birthday rings and gold necklaces, for gold bars. The store weighed the gold items brought in by customers to determine how many don they contained, then calculated the analysis fee for each item and the processing fee for the gold bar using a calculator. Choi (64), who exchanged a two-don pure gold ring for a two-don gold bar, said, "I visited my regular store to exchange my mother-in-law's ring for a gold bar," adding, "I thought a gold bar would be better for long-term storage than a ring I don't wear, so I came here with a friend."

As gold prices continue to hit record highs, more people are exchanging gold jewelry at home for gold bars. With gold prices on the rise, people are viewing gold as a long-term investment and are seeking to convert unused gold into assets. The exchange was possible immediately by paying the analysis fee and the gold bar processing fee, without the need to sell the gold item and separately purchase a gold bar. Inquiries at five gold shops in Jongno offering gold exchange services revealed that the cost to exchange 10 don of first birthday rings ranged from at least 90,000 won to as much as 170,000 won. A breakdown of the costs showed that the analysis fee averaged between 60,000 and 70,000 won, and the gold bar processing fee ranged from 30,000 to 100,000 won.

This is because gold bars are more advantageous than gold products when it comes to value assessment during transactions. A jewelry store owner in his 40s in Jongno, surnamed Ahn, explained, "Even if a gold item is made from pure gold, about 0.01% of it is solder, and since the non-gold part is excluded from the transaction, the higher the price of gold, the higher the analysis fee becomes." Ji Yeonhwa (63) said, "I quickly get tired of accessories and don't wear them much, but having a gold bar makes me feel secure," adding, "Now that the gold ring I had at home has become a gold bar, I feel like I have an asset." Kim (55), who was standing nearby, said, "Compared to gold keys or first birthday rings, gold bars are more refined and take up less space, so they seem like a more stable asset."

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The price of gold has risen by about 40% this year alone, with the price of one don (3.75g) surpassing 700,000 won. As of September 25, the purchase price for one don of gold at Korea Gold Exchange is 747,000 won. Kim Jeongsik, professor emeritus at Yonsei University's Department of Economics, explained, "With dollar supply increasing and liquidity expanding, and as the U.S. economy faces difficulties, demand for real assets is rising," adding, "Unlike gold products, which are cheaper when sold due to processing costs, gold bars do not have these costs, making them more attractive for investment purposes and driving up demand."

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