[Practical Finance] Gold Turned into 'Gold Price' Metal and Silver Rising Along... How to Invest

As of the 17th, gold bars are available at Nonghyup and Shinhan Banks
Hana Bank also sells 1kg gold bars
All banks have halted silver bar sales
Gold Banking and Silver Banking serve as alternatives
KRX gold market and ETF investment draw attention
"As safe-haven assets, up to 10% of a portfolio is appropriate"

Gold is gaining popularity as an investment product, with prices soaring to unprecedented levels. Sales of gold bars at banks have surged sharply, causing supply and demand concerns. Similarly, due to the rapid increase in silver investment, banks have completely halted the sale of silver bars. It is expected to take some time for the supply of physical bars to recover, and gold or silver accounts (Gold Banking or Silver Banking) are emerging as alternatives to physical gold investment. Investment through securities firms outside of banks is also possible.

Physical Gold and Silver Disappear from the Five Major Banks

According to the financial sector on the 19th, the sales of gold bars at the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) reached 50.212 billion KRW as of February 14. This figure is three times higher than last month’s 16.22 billion KRW, despite only half of February having passed. Compared to February last year (6.635 billion KRW), it has increased about eightfold. Especially since the Korea Minting and Security Printing Corporation, one of the main suppliers of gold bars, temporarily suspended supply to banks on the 12th, sales have increased further. Sales rose from 4.987 billion KRW on the 11th to 5.741 billion KRW on the 12th, and exceeded 10 billion KRW at 10.832 billion KRW on the 13th. When KB Kookmin Bank stopped selling gold bars from the 12th, sales at Shinhan Bank and NH Nonghyup Bank roughly doubled compared to the 11th, causing a concentration effect. Silver bar sales also increased twentyfold from 29 million KRW last month to 563 million KRW this month. Hana Bank does not sell silver bars.

Due to the overwhelming demand for physical gold and silver, banks have ultimately stopped sales. KB Kookmin Bank halted silver bar sales on the 17th following the suspension of gold bar sales. From that day, it resumed sales of 1kg Three M gold bars from Korea Gold Exchange but announced a delivery time of about five weeks, only to suspend sales again after one day. Shinhan Bank stopped selling three types of gold bars (1g, 3.75g, 37.5g) supplied by Korea Gold Exchange from the 14th and also ceased silver bar sales on the same day. Woori Bank stopped selling all types of gold and silver bars supplied by Korea Minting and Security Printing Corporation and Korea Gold Exchange from the 14th. A Woori Bank official said, “The Minting Corporation’s supply is suspended until the end of April, and the Gold Exchange’s until the end of March, but these dates may change.” NH Nonghyup Bank also stopped selling silver bars.

Investment Possible via Gold and Silver Accounts Instead of Physical Bars

Currently, only Nonghyup Bank and Shinhan Bank sell various types of physical gold bars. Nonghyup Bank sells seven types of gold bars weighing 3.75g, 10g, 37.5g, 100g, 187.5g, 375g, and 1kg, supplied by Korea Gold Exchange and Samsung Gold Exchange. Shinhan Bank sells three types of gold bars (10g, 100g, 1kg) supplied by LS MnM, an LS Group affiliate, which are produced in-house. These gold bars bear Shinhan Bank’s seal and are guaranteed by the bank. Although they are selling from existing stock, Shinhan Bank explained that due to high demand for the 10g bars, physical delivery will likely be possible only by the end of February or March. Hana Bank only sells 1kg gold bars supplied by Korea Gold Exchange.

Gold can also be bought and sold through account deposits. The Gold Banking product has seen a significant increase in balance thanks to the popularity of gold bars. As of the 14th, the combined Gold Banking balance at KB Kookmin, Shinhan, and Woori Banks was 901.9 billion KRW. Hana Bank and Nonghyup Bank do not offer Gold Banking products. This is the first time in history that the combined balance of these three banks has exceeded 900 billion KRW. Similar to gold bars, the balance increased by 15.3% compared to the end of last year (782.2 billion KRW) and by 8% compared to the end of last month (835.3 billion KRW), even though February is not yet over.

For silver, since silver bar sales have been suspended, investment is only possible through silver accounts (Silver Banking) at banks. Shinhan Bank is the only bank offering this product. The ‘Shinhan Silver Reissue Silver Tech’ allows free silver-related deposits and withdrawals regardless of term or amount. It offers various services such as scheduled trading and repetitive trading. The minimum transaction amount is 0.01g. Customers using internet trading or automatic transfers when purchasing can receive a 30% discount on the spread.

KRX Gold Market and ETFs as Alternatives

Investment in gold and silver is also possible through methods other than banks. The Korea Exchange (KRX) gold market is a representative example. By opening an account with a securities firm, investors can buy and sell gold through this market. Investment is possible in 1g units, and trading is easy with fees around 0.3%. There are also gold and silver-related ETFs. These can be invested in with just a securities account without opening a separate account, and real-time trading is available. Overseas silver ETFs can be purchased through domestic overseas securities accounts.

Safe-Haven Assets Gold and Silver... Investment Should Be Limited to Up to 10% of Portfolio

The reason gold and silver are attracting attention as investment products is that as Trump implemented tariff policies and corporate tax cuts, economic and financial market uncertainties increased, leading to a rush toward safe-haven assets. Central banks around the world began avoiding the dollar and started buying gold. The People’s Bank of China, for example, purchased large amounts of gold for three consecutive months until last month. The impact of U.S. inflation is also significant. As the U.S. inflation rate gradually rises, gold and silver are gaining attention as inflation hedges. Experts advise that since gold and silver do not yield interest or dividends and incur storage costs, their value as safe-haven assets is greater, recommending investment in gold up to a maximum of 10% of the total investment portfolio.