Gold Prices Rebound, Reviving Demand Among South Korean Retail Investors

Gold prices have rebounded from their June lows, driving up demand for gold investments among South Korean retail investors. Gold banking balances at KB Kookmin, Shinhan, and Woori banks turned positive for the first time in seven months, totaling 1.81 trillion won (approximately $1.3 billion) as of July 13th.

This marks a significant increase from January's record high of 2.44 trillion won (approximately $1.7 billion), which dropped to 1.73 trillion won (approximately $1.2 billion) by the end of July. However, with gold prices passing their trough and showing signs of recovery, retail funds started flowing back in.

Physical gold trading has also picked up on the KRX Gold Market, where net purchases reached 133 billion won (approximately $94.3 million) this month alone. Retail investors had been net sellers for three consecutive months before flipping to net buying.

The Bank of Korea's decision to resume physical gold purchases and its acquisition of shares in the SPDR Gold Shares ETF further stimulated domestic gold investment sentiment. Banks, including KB Kookmin, Woori, and Hana, are responding by improving product accessibility and cutting margins on gold bar sales.