Monthly Gold Bar Sales Reach KRW 30 Billion as Investment Demand Persists Despite Lower Gold Prices

[Financial News] Gold investment demand among bank customers has continued even after gold prices retreated from their peak. Banks that experienced gold bar shortages from last year through early this year have been securing supplies by adding suppliers and expanding the range of weights available for sale.
According to banking industry sources on the 6th, Hana Bank began brokering the sale and purchase of Samsung Gold Exchange gold bars on the 29th of last month. The bank added Samsung Gold Exchange to its existing supplier, Korea Gold Exchange. The gold bars sold at its branches come in four weights: 3.75g, 10g, 37.5g and 100g.
Other banks are also expanding their gold bar sales channels and product offerings. KB Kookmin Bank resumed selling gold bars through its mobile app and internet banking on the 10th of last month. Woori Bank added Korea Gold Exchange's 3.75g and 37.5g products last July, increasing the number of products it sells to five. Shinhan Bank added 112.5g, 375g and 500g products last May, expanding its gold bar brokerage offerings to seven types.
The banks' decision to increase their suppliers stems from shortages that persisted from last year through the first half of this year. As gold prices surged last October and suppliers' inventories declined, Nonghyup Bank stopped selling small gold bars and handled only 100g and 1kg products through the end of the year. Shinhan Bank also sold only 37.5g products for a time, while KB Kookmin Bank, Hana Bank and Woori Bank mainly supplied 1kg products through early this year.
Sales resumed as supply conditions partially improved this year, but it remained difficult to obtain the desired weights even during the first half. Through April, customers at KB Kookmin Bank, Shinhan Bank and Woori Bank were usually able to purchase only 1kg products. Having repeatedly experienced difficulties securing the products customers wanted during periods of surging gold prices, the banks are expanding both their suppliers and the range of weights they sell.
Gold bar sales have declined from their peak since gold prices underwent a correction, but demand remains higher than in the past. Sales at the five major banks—KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and Nonghyup Bank—totaled KRW 32.2 billion in May, KRW 32.7 billion in June, KRW 31.4 billion in July, KRW 33.5 billion in August and KRW 29.1 billion in September. In other words, roughly KRW 30 billion worth of gold bars continue to be sold each month. That is about four times the monthly average of KRW 8.5 billion from 2022 to 2024, excluding last year, when gold prices surged.
Funds also remain invested in gold banking, through which customers trade gold via bank accounts, in addition to physical gold bars. The gold banking balances at KB Kookmin Bank, Shinhan Bank and Woori Bank rose from KRW 1.9296 trillion at the end of last year to KRW 2.4434 trillion at the end of January this year.
The balances declined as gold prices later underwent a correction, but they stood at KRW 1.6714 trillion at the end of September. That was 47% higher than the KRW 1.1394 trillion recorded at the same time last year.
[email protected] Han Seung-gon Reporter