Gold Prices Surge to Record Highs, Gold Banking Hits ₩1.1 Trillion

# Gold Bar Shortage Persists, Yet Sales Surge Fourfold Year-Over-Year SEOUL—Investor enthusiasm for gold is skyrocketing, driving unprecedented demand for precious metal assets despite rising prices. South Korean banks are reporting significant increases in their gold banking service balances, while physical gold bars remain in short supply, creating a unique situation in the bullion market. Recent data reveals that the combined balance of gold banking accounts at KB Kookmin, Shinhan, and Woori Banks reached KRW 1.1025 trillion ($830 million) as of the end of April. This figure represents a KRW 76 billion ($57.2 million) increase from March's KRW 1.0265 trillion total and is 1.8 times higher than the KRW 610.1 billion recorded at the same time last year. Gold banking services, which allow investors to trade gold through specific accounts, have proven particularly popular during times of economic uncertainty and market volatility. # Rising Gold Banking Deposits Since early 2023, deposits in gold banking accounts have soared. While balances averaged between KRW 500 billion and KRW 600 billion during the first half of 2022, they began to climb rapidly in the latter half of the year, surpassing the KRW 1 trillion mark in March 2023. A key factor driving this growth is the robust rise in gold prices. According to the Korea Exchange (KRX), the price of 1 kilogram of gold settled at KRW 148,270 per gram on May 2. Although lower than the February 14 record high of KRW 168,500, this price indicates a 16.3% increase compared to the end of 2022. On a global scale, gold’s meteoric rise is also noticeable. Last month, the international spot price of gold exceeded $3,500 per ounce for the first time in history on April 22, reflecting continued investor demand for safe-haven assets. # Resilient Gold Bar Sales Amid Supply Challenges Despite facing persistent supply challenges, the physical gold bar market has seen a notable increase in sales. South Korea’s top five banks—KB Kookmin, Shinhan, Hana, Woori, and NH NongHyup—reported combined gold bar sales of KRW 34.87 billion ($26.2 million) in April. While this represents a slight decline from March’s KRW 38.64 billion, it is approximately 3.9 times higher than the KRW 8.983 billion recorded in April last year. Gold bar sales briefly surpassed the KRW 100 billion monthly mark in February, hitting an unprecedented high of KRW 88.293 billion due to demand spikes during the peak price period. The surge in gold bar demand earlier this year led to market shortages, prompting suppliers such as the Korea Minting and Security Printing Corporation (KOMSCO) and the Korea Gold Exchange to temporarily halt sales, resulting in the "gold bar scarcity" phenomenon. Although sales have resumed at select banks, much remains constrained. For example, KB Kookmin and Woori only sell 1-kilogram gold bars from the Korea Gold Exchange, while Hana offers 1-kilogram bars from both the Korea Gold Exchange and LS MnM. # Pre-orders and Limited Availability Amid dwindling inventories, some banks have introduced pre-order systems. Shinhan Bank has exhausted stock for LS MnM’s 10-gram and 100-gram bars, making them available only via reservation. Conversely, NH NongHyup continues to sell a range of gold products, including items from Samsung Gold Exchange and the Korea Gold Exchange. Plans are underway to reintroduce products from KOMSCO. Hana Bank will resume selling four types of gold bars—3.75 grams, 100 grams, 500 grams, and 1 kilogram—on May 7, while Woori Bank will offer five options, adding a 375-gram bar to its selection starting May 8. “Gold bar sales remain robust despite ongoing supply constraints,” commented an industry source. “Demand has consistently increased with the climbing gold price, backed by gold’s safe-haven appeal in an uncertain economic environment.” As both retail and institutional investors gravitate toward gold amidst global uncertainty, South Korea’s gold market exemplifies how surging demand can challenge supply chains in unexpected ways.