In a remarkable trend amid 2024’s fervor for the precious metal, South Koreans are turning to unconventional avenues to acquire gold, with vending machines and convenience stores emerging as unexpected hubs for purchases.
The allure of gold, typically associated with traditional avenues of acquisition, has found a new market among younger consumers in South Korea. Convenience store giant CU, in collaboration with the Korea Minting and Security Printing Corporation, has strategically placed gold bars alongside everyday essentials like kimchi and ramen, signaling a paradigm shift in consumer behavior towards investment in tangible assets.
Announced via a post on CU’s Instagram account on April 1, the partnership has seen the introduction of bite-sized gold bars in retail stores and vending machines nationwide. These compact ingots, weighing between 0.1 gram and 1.87 grams, offer affordability with prices ranging from 77,000 won ($56.4) to 225,000 won ($165.76) and come adorned with customizable messages for various occasions.
Reports indicate a swift uptake in sales, particularly for the 1-gram bars, which sold out within a mere two days, according to Korean news outlet Chosun Biz. Furthermore, CNBC has highlighted the involvement of another retail chain, GS25, which is also tapping into the trend by offering small gold wafers through vending machines.
Data sourced from CU’s app reveals that young Koreans are at the forefront of this trend, constituting 41.3% of total purchases, signaling a generational shift in investment preferences.
The surge in demand for gold is not limited to South Korea alone. Across Asia, a spike in consumer interest, coupled with acquisitions by global central banks, has propelled the price of gold to over $2,400 per ounce by mid-April.
The World Gold Council’s report indicates a substantial 20.2% increase in gold demand within South Korea over the past year. However, despite this surge, the country’s central bank has maintained its gold reserves at 104.4 tons since 2013.
In contrast, China, Asia’s largest economy, has witnessed a rapid accumulation of gold holdings. Fearing currency devaluation amidst economic uncertainties and a robust US dollar, Gen Z investors in China are turning to miniature bottles of “gold beans” for investment, while the central bank continues to bolster its reserves, aligning with efforts to diversify away from the dollar.
Market sentiments towards gold remain optimistic globally. Renowned economists like David Rosenberg predict a potential 30% surge, regardless of prevailing economic conditions, while industry stalwart Ed Yardeni forecasts a staggering 50% increase in the commodity’s value by the end of 2025, underscoring the enduring appeal of gold as a safe haven asset amidst volatile market conditions.