CNBC: Gold bars are selling like hotcakes in South Korea’s convenience stores and vending machines – 05/09/2024

In addition to ramen and sausages, stores in South Korea have a new popular item in stock – gold bars, reports CNBC.

The country’s largest convenience store chain, CU, has partnered with Korea Minting and Security Printing Corporation (KOMSCO) to offer customers mini gold bars – and they are selling like hotcakes, according to the source.

A variety of fingernail-sized gold bars, weighing between 0.1 grams and 1.87 grams, went on sale at CU outlets in April, the source added.

A 1.87-gram ingot sells for 225,000 won ($165.76), and a 0.5-gram one sells for 77,000 won, according to CNBC.

Priced at 113,000 won each, the 1 gram ingots sold out in two days, according to local news, the source said.

The ingots come with congratulatory messages, birthday wishes and even models for personality types, reports the mentioned press agency.

People in their 30s have been the most active buyers of these gold bars, accounting for more than 41% of total sales since their launch, according to the Pocket CU phone app, the source reports.

Those aged 40 represent 35.2% of sales, followed by those aged 50 with 15.6%. People aged 20 represented 6.8% of total sales.

Demand for bullion and coins from South Korea rose 27% year-on-year to 5 tonnes in the first quarter of this year amid rising prices for the yellow metal, the World Gold Council said in a recent report. This was the strongest quarterly increase in South Korean gold purchases in two years, the WGC said, according to CNBC.

Other convenience stores are also riding the bullion demand wave.

In the GS25 convenience store chain in South Korea, customers can buy small gold bars from vending machines, the source said.

“Usually in times of economic uncertainty, when the local currency depreciates, demand for physical gold jewelry increases as domestic investors look for safe haven asset investments,” said Heng Koon How, head of markets strategy, global economy and market research at UOB, according to the indicated source.

Gold prices rose to a record 456,000 won ($335.3) per 3.75 grams, or 0.13 ounces, according to the Korea Gold Exchange. In contrast, the Korean won has depreciated by more than 5% against the US dollar this year, currently trading at 1,358.7 to the dollar, according to CNBC.

The WGC has noted a recent trend of increased investment interest among a younger cohort in Asia, even as gold prices exceed record levels.

Consumers in Asia’s biggest economy, China, also bought gold, with collecting small 1-gram bars in glass jars becoming a trend among the country’s youth, according to the source.

China also leads consumer demand for bullion, with the country overtaking India in 2023 to become the world’s largest buyer of gold jewellery.