As demand for gold, considered a safe asset, increases, the gold banking balance has reached a record high. Gold banking is a product that allows gold transactions through a bank account. Instead of holding physical gold, the amount deposited is converted into the weight of gold.
According to the financial sector on the 6th, the gold banking balance of KB Kookmin, Shinhan, and Woori Bank, which handle gold banking, was reported to be 1.1025 trillion won at the end of last month. This is an increase of 76 billion won compared to the end of March (1.0265 trillion won) and a 1.8-fold increase from a year ago (610.1 billion won).
The gold banking balance was around 500 billion to 600 billion won until the first half of last year, but it surged from the second half of last year, surpassing 1 trillion won for the first time in March.
Gold prices are also soaring. According to the Korea Exchange, as of the 2nd, the spot price for 1 kg of gold in the KRX gold market is 148,270 won per gram. While this is a decline from the peak on February 14 (168,500 won), it is 16.3% higher than the end of last year (127,850 won). The international gold price surpassed $3,500 per ounce for the first time based on spot prices on the 22nd of last month.
The popularity of gold bars continues. The gold sales of the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) last month totaled 34.872 billion won, an increase of 3.9 times compared to April of last year (8.983 billion won). Due to supply instability, institutions like the Korea Gold Exchange temporarily halted sales, leading to a gold bar shortage.