South Korean convenience store chain GS Retail is now rolling out gold bar vending machines at its locations, and they are proving to be a great hit among customers.
GS Retail, with nearly 14,000 branches all over South Korea, reported that it has already sold a total of $19 million worth of gold bars in the past nine months ending in May. The gold bars were introduced in September 2022 at five of its stores in five sizes, weighing between 0.13 ounces to 1.3 ounces.
“The most popular gold bar is the smallest, the 0.13-ounce one, which is currently priced at around $225,” said one representative of GS Retail to UPI News Korea, who added that the prices of the bars fluctuate daily in accordance with the current international valuations for gold. Nevertheless, this does not seem to deter many adult Koreans from making purchases.
“People in their 20s and 30s appear to be the main buyers, purchasing physical gold as an investment vehicle, especially in times such as these, when its value is continuing to rise,” the representative added. GS has rolled out 29 gold bar vending machines with plans to increase this number to 50 by the end of the year. (Related: Central banks continue their streak of accumulating more gold in 2023.)
Lee Eun-hee, a professor of consumer studies at the Department of Consumer Science at Inha University in Incheon, noted that the multiple economic crises occurring in the U.S. – including persistent inflation and the collapse of big banks like Signature Bank and Silicon Valley Bank – appear to have increased interest in anti-inflationary assets like gold.
“But a gold bar purchased at a convenience store seems more like something done in fun rather than as a means for serious investment,” she added. “I believe the popularity of these gold bars is mainly due to its easy accessibility, at convenience stores no less.”
SoKor’s central bank is more cautious in purchasing gold
However, the Bank of Korea (BOK) – South Korea’s central bank – is projecting a more cautious stance and has adopted a more careful approach to gold purchases, favoring the liquidity of the American dollar.
The BOK expressed concerns about the direction of gold prices, citing the potential peaking of gold values and the challenges associated with selling for liquidity purposes.
In its June report, the central bank highlighted the necessity of a cautious stance when considering an increase in the ratio of gold in foreign exchange reserves. The central bank currently holds 104.4 tons of gold in its reserves, representing approximately 1.14 percent of its total reserves.
In the early 2010s, Seoul’s central bank faced a major backlash after purchasing 90 tons of gold when prices peaked at more than $1,920 an ounce. Following years of lower prices, gold only surpassed those levels again in 2020.
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At present, spot gold is trading at $1,963.20 an ounce. BOK Governor Rhee Chang-yong stated during a National Assembly session earlier this year that the bank has refrained from increasing its gold holdings since 2014 due to the prolonged low price of gold.
GoldReport.news has more stories on the growing demand for gold.
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