"The news said gold prices are up, so why am I losing money when I sell?"...160,000 won gap between buying and selling prices, why?

[Financial News] "The news said the gold price has gone up, but when I actually tried to sell, the price I was offered was nowhere near that."

As international gold prices hit record highs day after day, more consumers are looking to sell or invest in gold. However, many are confused by the gap between the prices quoted at jewelry stores and the market prices they see reported.
The biggest reason for this confusion is that people are looking at different reference prices. Ordinary consumers often check gold prices on online sites and assume they can sell their gold based on those figures. In many cases, though, the selling price they see online is the international gold price. While the domestic gold price does reflect the international gold price, it does not follow it exactly.
Even on the same day, the gold price changes depending on the exchange rate. Moreover, the domestic gold price itself is essentially just a reference point.
A Korea Gold Exchange official explained, "Even if the price per barrel of Dubai crude oil is announced for today, that does not mean every gas station sells at that price. In the same way, the gold price is only a kind of reference price, and each seller has a different cost structure, so the final prices will inevitably differ."
The price gap between buying and selling also leads to consumer misunderstandings. According to the gold price announced on the 19th of this month, a 3.75 g piece of 24-karat gold (one don) costs 971,000 won to buy, but only 807,000–808,000 won when you sell. For the same gold, the difference between the buying and selling sides exceeds 160,000 won.
Some people suspect, "Aren't jewelry stores taking excessive commissions?" but industry insiders say structural factors play a bigger role.
When you buy gold, a 10% value-added tax is added, but you cannot get that tax back when you sell. On top of that, costs related to gold bar production are reflected, including labor, machine use, electricity, processing fees, transportation, and distribution margins.
Industry officials said that, on average, the purchase price includes roughly 15% more in costs than the selling price.
The recent rise in gold prices has also increased the number of people trying to sell, which affects the "selling" price. When supply exceeds demand, buyers have no choice but to set purchase prices more conservatively.
Another reason for price differences is that even 24-karat gold is classified by purity levels such as 99.99%, 99.9%, and 99.5%.
These purity differences arise from issues related to refining and metalworking technology. When purity varies, a process to offset purity differences in gold bar production is required, and the refining charge incurred in this process affects the selling price.
Given this structure, those investing in physical gold generally need the market price to rise at least 20% above their purchase price before they can expect an actual profit. Experts advise that, for physical gold investment, 24-karat gold bars are relatively more advantageous than 14-karat or 18-karat jewelry.
Instead of physical gold, investors can also use financial products such as a gold passbook account or a gold exchange-traded fund (gold ETF). In these cases, the same reference price is applied when buying and selling, making transactions simpler. However, as these are financial products, the principal is not guaranteed, and capital gains tax may be imposed on trading profits.

moon@fnnews.com Moon Young-jin Reporter