Value context and insight. lkm@koreatimes.co.kr
Gold banking investment surges amid record-breaking prices
Gold bars are on display at Korea Gold Exchange in Jongno District, Seoul, Monday. Yonhap
By Lee Kyung-min
Gold investments through banks are surging as the precious metal sees prices hitting record highs, market watchers said Monday.
The rapid rise in gold demand comes amid growing investor appetite for safe-haven assets as geopolitical uncertainty continues and the U.S. dollar weakens.
According to financial market data, gold banking accounts at KB Kookmin, Shinhan and Woori had a combined balance of over 2.1 trillion won ($1.4 billion) as of Thursday. This is up 11.4 percent from the end of last month, when it stood at over 1.9 trillion won.
The combined balance surpassed 2 trillion won just 10 months after it first crossed the trillion-won mark in March last year.
International gold prices have recently exceeded $5,000 per ounce for the first time amid intensifying investor expectation that gold could be a hedge against future financial shocks.
There is also a rise in gold bars sold at banks.
From Jan. 1 to 22, the country’s top five banks — KB Kookmin, Shinhan, Hana, Woori, NH NongHyup — sold a combined 71.67 billion won’s worth of gold bars, about double the 35 billion won in gold sold last month.
The recent gold price surge largely defies earlier expectations that the precious metal’s rally would be limited since it spiked nearly 70 percent last year.
However, growing geopolitical tensions in the Middle East have sparked upward momentum.
U.S. President Donald Trump said a major U.S. fleet was heading toward Iran as a precautionary measure, sending gold and silver prices higher.
The rally was driven by worries that the U.S. might attempt a regime change by force, fueling fears of a military escalation.
Many say the rally is likely to continue in the short term due to heightened uncertainty in U.S. foreign policy.
“Given the current environment, precious metals are expected to remain strong in the near term,” said Park Sang-hyun, an analyst at iM Securities.
While gold is traditionally viewed as a safe haven asset, the recent surge increases volatility and is not without risk, he added.
“Investors are advised to maintain a balanced portfolio and avoid overexposure to gold as price corrections could occur if geopolitical tensions ease or dollar strength returns,” Park said.