Silver Bar Shortages Signal an Overheated Precious Metals Market
Lee, a 30-something office worker, recently found herself in a dilemma while choosing a first birthday gift for a friend's child. The price of gold has soared to unprecedented levels, and even the price of silver spoons, once considered an alternative to gold rings for first birthdays, has skyrocketed. Lee said, "My friend's child is turning one, but gold rings are too expensive. I looked into silver spoons, but they were just as pricey," adding, "In the end, I decided to give a baby product in the 100,000 won range that my friend picked out."
A silver spoon for infants displayed at a store in the jewelry district of Jongno, Seoul, visited on the 11th. Photo by Choi Youngchan
The days when people would give silver spoons as a less burdensome alternative to gold rings are now a thing of the past. As precious metal prices have surged across the board, it has become increasingly common to exchange cash or practical gifts instead.
According to the Korea Exchange on December 13, as of the 11th, the price of one don (3.75g) of pure gold stood at around 750,000 won. Even if you opt for a half-don or a 1g gold ring for a first birthday, the total cost easily exceeds 200,000 to 300,000 won when including processing fees. Meanwhile, the price of silver has also surpassed $60 per troy ounce (about 31.1g), continuing its steep climb. As a result, the price of a set of silver spoons has risen above 200,000 won, increasing the financial burden for consumers.
With prices continuing to rise and a surge in silver investment, shortages are now occurring. The Korea Gold Exchange announced that it would temporarily halt the supply of silver bars from October 20 this year until January 1 next year, citing a shortage of silver supply.
A jewelry store owner in the Jongno 3-ga jewelry district of Seoul said, "A set of silver spoons for infants, with 80% silver purity and weighing 20 don, is priced at about 255,000 won. If the purity is higher, the price goes up even more," adding, "Prices have been rising continuously, and they probably went up again today." Another merchant also commented, "I often tell customers these days, 'It's always cheapest when you buy it now,' because prices have been rising nonstop since the beginning of this year."
Kim Daejong, a professor at the School of Business Administration at Sejong University, analyzed, "Expectations for a U.S. interest rate cut have grown, leading to a decline in real interest rates and weakening upward pressure on the dollar. These are major factors behind the rise in gold and silver prices." He added, "The prolonged geopolitical risks in regions such as the Middle East and Ukraine have also strengthened the preference for safe-haven assets, further driving up precious metal prices."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
