Gold Bar Sales Triple as Gold Prices Plunge
Although international gold prices have fallen 27% from their record high, gold bar sales at South Korean banks have instead more than tripled, as investors rushed to buy at a discount. Gold futures on the New York Mercantile Exchange opened two days ago at $4,133.15 per ounce, about 27% below the all-time high of $5,626.8 recorded on January 29. After rising early in the year, gold futures plunged about 30% over roughly five months to $3,955.4 per ounce on June 30, then rebounded to $4,755 by August 25 before sliding another 13% over the past month and a half.
According to the financial industry, gold bar sales at the country's five major banks totaled 29.1 billion won last month — 3.4 times the monthly average of 8.5 billion won for 2022-2024. The figure reflects investors seizing the price dip as a buying opportunity. A similar trend has emerged overseas: the World Gold Council (WGC) reported that global physical gold-backed exchange-traded funds (ETFs) saw net inflows of $31 billion (about 41.6 trillion won) in the third quarter of this year, a record for a single quarter.
Revived demand for gold is also attributed to unease in financial markets. The United States' massive fiscal deficit and rising Treasury yields have fueled concerns in the bond market, while worries persist about overvaluation in the U.S. stock market, which has climbed to record highs on the artificial intelligence (AI) boom. Analysts say investors are turning to gold to diversify risk away from stock- and bond-heavy portfolios.
Purchases by global central banks are another factor supporting prices. According to Goldman Sachs, central banks bought an average of 91 tons of gold per month over the past three months — more than five times the pre-2022 monthly average. Goldman Sachs forecast gold prices to reach $5,400 per ounce by the end of next year, though it noted that a recovery could be delayed if U.S. Treasury yields and international oil prices remain elevated.
