Gold banking, bar sales hit records amid price surge

In September, Kim, a 30-year-old office worker who asked to be identified only by his surname, opened a gold banking account and began accumulating gold. These days, he checks the account several times a day. He said he felt uneasy when gold prices dipped, but as prices recently climbed to fresh highs, his return has surpassed 5 percent. “I think prices could rise further, so I plan to increase my allocation whenever there is a correction,” Kim said.

Sales of gold bars and silver bars, along with balances in gold banking accounts at major commercial banks, have reached their highest levels since records were first compiled. As economic uncertainty has deepened, prices of gold and silver, widely viewed as safe-haven assets, have jumped about 70 percent and 150 percent, respectively, so far this year. The surge represents the strongest annual gains in more than half a century and has fueled robust buying interest in South Korea.

● Silver bar sales surge 38-fold from last year

According to the financial industry on Dec. 28, the country’s five major commercial banks, KB Kookmin, Shinhan, Hana, Woori and NH NongHyup, sold 677.974 billion won worth of gold bars from the start of the year through Dec. 24, the day before Christmas. The amount is more than four times last year’s full-year sales of 165.442 billion won and represents the highest level since related statistics were first compiled in 2020.

At four banks that disclose sales by weight, excluding NH NongHyup, the total volume of gold bars sold reached 3,745 kilograms. That figure more than doubled from a year earlier.

Silver bars have also seen supply shortages. Sales at four major banks, excluding Hana Bank, which does not handle silver bars, totaled 30.68 billion won this year, compared with 799 million won last year, a 38-fold increase. Banks estimate that individual investors account for the bulk of purchases of both gold and silver bars.

Gold banking accounts, which allow customers to accumulate gold in a manner similar to bank deposits, also posted record results this year. As of Dec. 24, Shinhan Bank’s Gold Riche product had 187,859 accounts with total balances of 1.2979 trillion won. Shinhan Bank said both the number of accounts and the total balance are the highest since the product was introduced in 2003. Compared with last year, balances increased by about 2.4 times, while the number of accounts rose 14 percent.

● Gold and silver Santa rally fuels buying momentum

The unprecedented surge in gold and silver investment has been driven largely by international prices repeatedly setting new records, further igniting demand. Since the beginning of the year, gold prices have risen about 70 percent and silver prices more than 150 percent, marking the strongest annual gains for both metals since 1979.

Gold and silver prices maintained their upward momentum toward year’s end, extending what is commonly known as a Santa rally. According to Bloomberg, international spot gold prices climbed as much as 1.2 percent intraday on Dec. 26, local time, the day after Christmas, topping $4,530 per troy ounce, or 31.1 grams. That level surpassed the previous intraday high recorded just one day earlier. Spot silver prices also extended gains for a fifth consecutive session, rising as much as 4.6 percent intraday and breaking above $75 per ounce for the first time.

Experts remain broadly optimistic about gold and silver prices, while warning that volatility should not be underestimated. “If the United States maintains its rate-cutting stance, prices could move higher from current levels,” said Lee Heung-doo, head of the Seoul Forest PB Center at KB Kookmin Bank. “Silver, however, typically has lower trading volumes and greater price volatility, which means investors need to approach it with caution.”


주현우 기자 woojoo@donga.com