[AldonSseulJob] Gold Prices Hit All-Time High... Everything About 'GeumTech'

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Recently, there have been articles reporting that the price of gold has risen day after day, reaching an all-time high.

You may have seen such articles at least once.

The price of gold has surged more than 30% just this year.

With the stock market sluggish and interest rates being cut, causing deposit and savings interest rates to fall,

the appeal of investing in gold is growing significantly these days.

So, let's find out why the price of gold is rising and what methods there are for investing in gold.

[Image source=Yonhap News]

Gold Price, All-Time High

According to the Korea Exchange, as of October 9, the price of one don (3.75g) of gold is 431,550 KRW.

This means 115,080 KRW per gram (g).

This level once again broke the highest price of 114,980 KRW recorded in the past year, and represents about a 42% increase from the lowest price of 81,000 KRW in the past year.

Why Does the Gold Price Rise?

So, you might wonder why the price of gold is rising?

Gold is a representative safe-haven asset and tends to rise in price when inflation expectations increase or interest rates fall.

This is because it is considered a tangible asset that can protect against the decline in currency value caused by rising prices.

Recently, the U.S. Federal Reserve (Fed) cut interest rates,

and as expectations of further Fed rate cuts continue to emerge, the anticipation of rate cuts seems to have fueled the rise in gold prices.

[Image source=Reuters Yonhap News]

Geopolitical risks are also cited as a cause for the rise in gold prices.

The Russia-Ukraine war, geopolitical risks in the Middle East, and the upcoming U.S. presidential election in November are all driving gold prices higher as a safe-haven asset.

Also, increased gold purchases by central banks of various countries have contributed to the rise in gold prices.

Especially among emerging countries, central banks are steadily buying gold to diversify their foreign currency reserves,

with China and India reaching record highs in gold holdings within their foreign reserves, indicating strong demand for gold investment by central banks.

Lastly, we need to consider the relationship between the dollar and gold.

The dollar and gold have an inverse relationship.

When the U.S. Fed injects a lot of dollars into the market, gold prices tend to rise.

So, How Do You Invest in Gold?

[Image source=Yonhap News]

There are mainly two ways to invest in gold:

buying physical gold and investing in gold-related financial products.

When people think of physical gold investment, they often think of gold bars.

In the past, you had to visit jewelry districts to buy gold,

but nowadays, you can purchase gold bars through home shopping and banks.

However, when buying gold bars, you must pay about 10% manufacturing costs and high fees.

Also, cash purchases are restricted to prevent buying gold for illegal purposes such as money laundering.

[Image source=Yonhap News]

Another way to trade physical gold is through the Korea Exchange Gold Market.

This is the only on-exchange physical gold trading market in Korea.

You can open an account through member securities firms and trade gold like stocks.

The trading unit starts from 1g, and you trade at market prices, with the advantage of no tax on capital gains.

However, physical withdrawal is only possible in 1kg units, and a 10% value-added tax applies to the transaction price.

Other representative gold investment products include bank gold accounts (Gold Banking) and gold-related Exchange-Traded Funds (ETFs).

First, gold accounts allow you to invest in gold freely without physical delivery, with flexible deposits and withdrawals.

The trading unit is 0.01g, and these accounts are not protected by deposit insurance.

Also, 15.4% withholding tax applies to trading gains, and they are subject to comprehensive financial income taxation.

When closing a gold account, account transactions are settled in cash, and physical transactions are settled in gold.

If you withdraw physical gold, fees and value-added tax will be charged.

Gold ETFs can be easily traded like stocks with just a securities account.

Gold futures investment is also possible.

Gold futures involve investing in the future volatility of gold prices,

offering high returns but also high risk of losses, so please be cautious.

[Image source=Yonhap News]

What Gold Banking Products Are Available at Domestic Banks?

With the significant rise in gold prices this year, the number of gold banking accounts at domestic commercial banks has increased significantly.

The number of gold banking accounts increased by 5.2%, from 250,945 at the end of last year to 250,945 at the end of last September.

The gold banking balance, which was 517.7 billion KRW at the end of last year, rose 28.6% to 666 billion KRW during the same period.

So, what gold investment products are available at domestic banks?

Among commercial banks, KB Kookmin Bank, Shinhan Bank, and Woori Bank offer gold banking products.

KB Kookmin Bank offers the 'KB Gold Investment Account',

while Shinhan Bank and Woori Bank offer 'Shinhan Gold Reissue Gold Tech' and 'Woori Gold Investment', respectively.

These accounts allow flexible deposits and withdrawals and enable free investment in gold without physical delivery.

The minimum trading unit is 0.01g, and you can sign up through branches, internet banking, or mobile applications.

However, note that these products are not protected under the Deposit Protection Act and do not offer separate interest.

Gold, considered a representative safe-haven asset,

is especially attractive for those seeking stable investments.

Rather than only paying attention when gold prices rise,

it is recommended to allocate about 10% of your total investment portfolio to gold when prices are low.

As we have seen, there are various ways to invest in gold,

so you might consider investing through physical gold, gold bars, bank gold banking, gold ETFs, and other methods.

We hope today's information was useful and money-making for you,

and thank you to all readers for reading.

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