Even on Reexamination, Gold... KRX Gold Market's Daily Average Trading Volume Up 27% Year-on-Year

Following a 140% Increase Last Year, Another Rise

[Asia Economy Reporter Minwoo Lee] Amid ongoing market uncertainties such as the resurgence of COVID-19 originating from India, attention is focusing on gold, a representative safe-haven asset. Accordingly, trading volume in the Korea Exchange (KRX) gold market is also showing a significant upward trend.

On the 16th, the Korea Exchange announced that as of April 30, the average daily trading volume in the KRX gold market was 134.4 kg, a 27.2% increase compared to the previous year. This marks another sharp rise compared to last year, which saw a 142.6% increase year-over-year. Since the Korea Exchange opened the KRX gold market on March 24, 2014, with approval from the Financial Services Commission, the trading volume has steadily increased except for a single decline in 2018 (down 16.2% compared to the previous year).

Provided by Korea Exchange

The primary reason for its popularity is the trust guaranteed by the Korea Exchange. The gold traded in the KRX gold market is of high quality with a purity of 99.99%, certified by the Korea Minting and Security Printing Corporation. All gold is securely stored at the Korea Securities Depository. Additionally, trading trends and bid information in the KRX gold market are fully disclosed, allowing investors to trade with confidence.

Among various investment methods such as KRX gold market trading, physical gold trading (gold shops), gold banking, and bank gold trusts, the investment cost is also emphasized as the lowest. A Korea Exchange official explained, "The KRX gold market price is formed at about 100.1 to 100.4% of the so-called wholesale price level, the ‘international gold price,’ allowing trading at a relatively low cost. Also, when ordering online through securities firms' Home Trading Systems (HTS), the commission fee is around 0.2%, which is the cheapest compared to other investment methods like bank gold banking (1%)."

The application of non-taxation on capital gains is another notable advantage. Since capital gains are tax-exempt, they are naturally not subject to comprehensive financial income taxation. Capital gains from gold banking or gold Exchange-Traded Funds (ETFs) are taxed as dividend income, with 15.4% withheld at source. A Korea Exchange official emphasized, "The KRX gold market is the only government policy market where investors can receive tax-exempt benefits at the lowest cost. It is the most efficient market for both investors expecting capital gains and those wishing to withdraw physical gold."