Gold Rush in Korea: Surging Prices
Kimchi Premium & Global Market
News has spread that gold prices are nearing 3,000 dollars per ounce, and the streets of Jongno in Seoul have suddenly become crowded with people looking to buy or sell gold. One gold shop owner reported closing earlier than usual because all their gold bars were sold out by mid-afternoon. A grandmother shopping for her grandchild’s first-birthday ring lamented that she could only afford a half-don (about 1.875g) ring instead of the full 1-don ring, saying, “I feel bad, but it’s simply too expensive right now.”
According to data collected from five major Korean banks (KB Kookmin, Shinhan, Woori, Hana, NH Nonghyup), gold bar sales between February 1 and 13 reached approximately 406 billion won—about 20 times higher than the same period last year. The demand for gold was so high that the Korea Minting, Security Printing & ID Card Operating Corp. (KOMSCO) temporarily halted gold bar supply, and some banks have also ceased gold bar sales for the time being. Gold banking deposits at several large banks have likewise soared, surpassing previous records. On Korea Exchange (KRX), domestic gold prices recently closed at 163,530 won per gram, nearly 20% higher than the international price of around 136,130 won per gram—an unusual gap often referred to locally as the “Kimchi Premium.”
Internationally, gold is in the spotlight as well. In the United States, gold futures jumped to 2,909 dollars per ounce, while in London, gold was trading about 20 dollars cheaper. Investment banks are taking advantage of this difference by purchasing gold in London and shipping it to the U.S., prompting what one analyst called “one of the largest transatlantic gold transfers in recent years.” In contrast, other assets like the S&P 500 have shown relatively modest gains, and even Bitcoin, once predicted to be the top ‘Trump-era’ trade, fell back from its peak. Analysts suggest that heightened economic uncertainty—driven by new tariffs and trade tensions—continues to push investors toward gold as a safe-haven asset.
Still, some people are selling off gold items they’ve kept at home for years, hoping to lock in profits while prices remain high. Stories abound of individuals walking into gold shops with entire gold bars, jewelry sets, or even large gold spheres to see how much they can net. Others, convinced that prices will rise even further, are investing tens of millions of won in gold. Financial advisors, however, warn against rushing in solely for short-term gains. While gold can serve as a hedge against inflation or market volatility, experts emphasize a balanced, long-term approach over speculative trading.
Ultimately, the current market surge, along with a marked Kimchi Premium in Korea, reminds us that rapid price increases often come with risks of overheating. If global trade tensions persist, gold prices may remain elevated for some time. On the other hand, any resolution in major trade disputes might stabilize or even ease gold’s bullish run. For now, measured steps—rather than impulsive buying or selling—seem to be the consensus advice among industry insiders.
This article was written with the help of AI.
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