After Peaking, Gold Prices Decline... Investors Move Actively
After reaching a record high, gold prices have started to decline, while the balance of gold banking at major commercial banks has surged. This is interpreted as investors, who believe that gold prices will rise again in the long term, are actively moving.
As investors who believe that the rise in gold prices will continue are actively moving, the balance of gold banking at major commercial banks surged last month. Yonhap News
원본보기 아이콘According to the Korea Exchange on November 3, the price of pure gold per gram closed at 188,750 won on October 31 in the KRX gold market. Although this was up 2.81% from the previous trading day, it had fallen more than 16% in just half a month compared to the all-time high closing price of 227,000 won on October 15. The decline in gold prices is attributed to the easing of the US-China trade conflict after US President Donald Trump and Chinese President Xi Jinping met at the 2025 Asia-Pacific Economic Cooperation (APEC) Summit held in Gyeongju, North Gyeongsang Province. As a result, the appeal of gold as a safe-haven asset has somewhat diminished.
Gold Banking Balances at Major Banks Surge... 1.6 Trillion Won, Highest This Year
As gold prices declined, gold investors also became more active. According to the banking sector, the gold banking balances at KB Kookmin Bank, Shinhan Bank, and Woori Bank totaled 1.6203 trillion won as of October 30. This represents an increase of 203.2 billion won compared to the end of September (1.4171 trillion won), and is the highest level so far this year. Gold banking is a product that allows customers to buy and sell gold in units as small as 0.01 grams. When money is deposited into this account, gold is purchased at the current market price, and when withdrawn, it is sold at the then-current price and the equivalent amount is returned in Korean won.
The gold banking balances at the three banks surged at the beginning of this year, surpassing 1 trillion won for the first time in March. After maintaining a similar level for a while, the balances increased sharply again in September, exceeding 1.4 trillion won, and last month surpassed 1.6 trillion won. An official at a commercial bank said, "It seems that investors who judged that gold prices were in a correction phase have become more active."
In fact, the number of gold account subscriptions also surged within a month. According to Shinhan Bank, the number of Gold Rich accounts stood at 184,839 as of October 30, an increase of 6,440 from the previous month (178,399). This is the highest monthly increase since January 2022.
Diverging Outlooks for Gold Prices... Experts Advise Caution in Investment
However, market forecasts for gold prices are mixed. In a report, UK-based Capital Economics stated, "The sharp rise since last August is difficult to justify compared to previous gold rallies," and lowered its year-end forecast for gold to $3,500 per ounce. In contrast, Bank of America commented, "The market has entered an overbought zone, which triggered this week's correction," and forecast the average gold price for the fourth quarter at $3,800 per ounce. The bank also stated, "The bull market for gold is not over yet," projecting next year's price at $5,000 per ounce.
Experts advise that since gold prices are difficult to predict, it is important to establish clear investment criteria. Jeong Sungjin, Deputy Director of the Gangnam Star PB Center at KB Kookmin Bank, said, "Rather than investing a large sum, it is advisable to diversify within 10% of your liquid assets."
