Gold 1 Don 374,000 KRW
Gold Investment via Physical Gold Accounts Also Popular for Financial Planning
Recently, domestic gold prices have reached an all-time high and are showing an upward trend. This is because demand surged for gold, a representative safe-haven asset, amid international instability caused by the war between Israel and Hamas.
According to the Korea Exchange (KRX) on the 18th, the price of 1g of gold in the KRX gold market, which was in the 70,000 won range in March, reached 86,820 won on the 30th of last month, setting a record high in half a year. Additionally, on the 28th of last month, the price of 1 don of gold recorded an all-time high of 374,000 won.
Gold prices began to rise sharply on the 10th of last month, right after Hamas's surprise attack on Israel, increasing by more than 10% in just over a month. Due to this situation, a 3.75g one-don stone ring, including processing fees, has exceeded 400,000 won, making it an expensive gift. In response, half-don gold rings, 1g mini gold rings, gold spoons, and even paper stone rings containing 0.2g gold bars have become popular as 돌 (doljanchi) gifts.
Along with this, interest in gold investment is also on the rise.
The number of gold spot accounts opened by general investors at securities firms to invest in the KRX gold market exceeded 1.05 million in the first half of this year. The number of gold spot accounts has been increasing annually, with 885,000 at the end of 2021 and 986,000 at the end of 2022.
Among gold spot account holders, those aged 30 and under account for 46%, indicating that the younger generation, savvy in financial management, shows high interest in gold investment.
Methods of investing in physical gold include trading through the KRX gold market, buying and selling physical gold (gold shops), bank gold banking, and gold funds, but the method with the lowest transaction costs is using the KRX gold market.
The Korea Exchange explained, "The advantage of the KRX gold market is that capital gains from trading are tax-exempt," adding, "This is a benefit rarely seen in other gold investment products, and since capital gains are tax-exempt, they are not subject to comprehensive financial income taxation." In contrast, investing in gold through bank gold banking and gold funds incurs a 15.4% dividend income tax on capital gains.
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