Gold Banking Service Gaining Popularity
By Na Jeong-ju
Staff Reporter
Banks plan to strengthen gold banking services to enable more clients to invest in gold in line with surging global demand for the metal.
Early this month, Shinhan Bank launched the sale of gold bars at its nationwide branches, reflecting the growing popularity of gold as a safer investment item. It opened ``Gold Riche'' accounts last year, in which investors can save gold, instead of money.
``Those who bought gold through Gold Riche accounts six months ago reaped 36 percent in investment gains as gold prices have risen sharply,'' a Shinhan official said. ``The average transactions of gold through the accounts stood at 963 kilograms a day, but it has grown to 1,890 kilograms.''
Kookmin Bank and Industrial Bank of Korea, whose interest rates are linked to international gold prices, plan to release gold accounts late this month.
Gold has emerged as a popular investment item around the world as oil prices have surged and the dollar's value has dropped.
Gold prices jumped to a record high of $914.30 an ounce last week on the back of factors that included the struggling dollar and geopolitical concerns in Iran and Pakistan.
The upward trend is expected to continue for the time being, with some analysts predicting $1,000 per ounce this year.
Kookmin officials said the bank will expand gold banking services this year as more people are expected to show interest in investing in gold.
``It is the first time for us to offer gold banking services, which debuted here in 2003, but gained little attention from banks,'' a Kookmin official said. ``We've decided to tap the market in line with the growing demand for gold and forecasts of global economic slowdown.''
Customers who want to invest in gold should open gold banking accounts first. They can get interest income if gold prices rise, and the amount of interest will be in proportion to the increases of price, the official said.