"Letting Your Money Sit Idle Makes You Poor Overnight"... With Real Estate Blocked, Investors Piled Into 'This'

Individual Investors Scoop Up Gold, Silver, and Dollars This Year
Clear Preference for "Safe Assets" Amid Growing Uncertainty

This year, the flow of funds from individual investors was busier than ever. In the early part of the year, funds that had flocked to real estate during the temporary lifting of land transaction permit requirements quickly shifted to domestic and overseas stocks and alternative assets as regulations tightened again. On top of this, global interest rate trends, geopolitical risks, and exchange rate volatility all contributed to a pronounced preference for so-called "safe assets" such as gold, silver, and the US dollar. As asset prices surged amid ample liquidity, the perception that "holding cash means losing money" became widespread.

On February 18th, all gold bar products on the monitors at the Korea Gold Exchange Jongno Main Branch in Jongno-gu, Seoul, were marked as sold out.

'Letting Your Money Sit Idle Makes You Poor Overnight'... Five Major Banks Hit Record Sales for Gold Bars, Silver Bars, and Gold Accounts This Year

According to the financial sector on December 28, the total value of gold bars sold by the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) from the beginning of the year through December 24 reached 677.974 billion won. This is the highest figure since related statistics began to be compiled in 2020. It is more than four times last year's annual sales of 165.442 billion won. Excluding NH Nonghyup, which does not provide sales volume data, the four other banks sold a total of 3,745 kilograms of gold bars, also a record high-2.7 times higher than a year ago.

Demand for silver bars also soared thanks to a sharp rise in silver prices. The total sales of silver bars this year at the four major banks (excluding Hana Bank, which does not handle silver bars) reached 30.68 billion won, the highest ever in the banking sector's time series. This is 38 times last year's figure of 799 million won. An official from a commercial bank stated, "While it is difficult to precisely distinguish the main buyers of gold and silver bars, most should be considered individual investors. Since joining the bank, I have never seen ordinary individual investors buy so much gold and silver as they have this year."

Image generated by AI to aid understanding of the article. ChatGPT

Gold banking accounts, which allow customers to save gold as if it were a deposit, also set new records this year. For Shinhan Bank's "Gold Rich" product, there are currently 187,859 accounts with a total balance of 1.2979 trillion won linked to the value of gold. Both the number of accounts and the balance are the highest since Shinhan Bank launched the product in 2003. Compared to the end of last year (549.3 billion won, 165,276 accounts), the balance has increased 2.4 times and the number of accounts has grown by 14%.

Sustained High Exchange Rates and the Boom in Currency Investment

With the won-dollar exchange rate remaining above 1,400 won throughout the year, the US dollar also attracted attention as an alternative investment. The balance of individual US dollar deposits at the five major banks currently stands at 12.73 billion dollars. This is an increase of 917 million dollars compared to the end of last year, and it marks the highest level in four years since the end of 2021 (14.653 billion dollars). On December 24, after the foreign exchange authorities verbally intervened and the won-dollar exchange rate plunged by more than 30 won, a Hana Bank branch in the Gangnam area of Seoul ran out of $100 bills.

On the 24th, when the dollar-won exchange rate plummeted, a notice was posted at a Hana Bank branch in the Gangnam area of Seoul stating that $100 bills had run out. Online community

Experts view this year's flow of individual funds as a typical investment pattern that emerges in an environment of heightened uncertainty. As real estate regulations and stock market volatility increased, funds moved into relatively stable real assets and key currencies. Given this trend, many predict that individual investors' preference for safe assets is likely to continue for the time being.