GS Retail confirmed last week that sales of gold bars at convenience stores totaled $19 million in the nine months ended May.
Gold bars dispensed through vending machines were introduced in September last year at five GS Retail stores. The machines offer gold bars in five sizes, ranging in weight from 0.13 ounces to 1.3 ounces.
According to GS Retail, which operates more than 10,000 convenience stores across South Korea, the price of gold fluctuates daily according to international pricing.
The popularity of gold bars at stores has prompted the company to increase the number of gold stores to 29 and aims to reach 50 stores by the end of this year.
“The most popular gold bar is the smallest, 0.13 ounce, which is currently priced at around $225,” a GS Retail representative told UPI News Korea .
“People in their 20s and 30s seem to be the main buyers. They are buying physical gold as an investment vehicle, especially in times like these when the value of gold continues to rise,” he said.
Gold prices started rising in March amid the Silicon Valley Bank (SVB) bankruptcy and many people turned to gold as a safe investment channel.
“Low inflation and the SVB crisis seem to have made many people interested in inflation-protective assets like gold. But a gold bar bought at a convenience store seems more like something to buy for fun than a serious investment vehicle. I believe the popularity of these gold bars is largely due to their easy accessibility at convenience stores,” said Professor Lee Eun-hee of Inha University.
Regarding the Korean economy, according to recent data from Statistics Korea, the consumer price index (CPI) - a measure of inflation - increased 3.3% in May compared to the same period last year, compared to the 3.7% increase recorded in April. This is also the lowest increase recorded since October 2021, when the figure was 3.2%. Korean inflation is on a downward trend after reaching a 24-year peak of 6.3% in July 2022.
According to Minister Choo Kyung-Ho, these are positive signs showing that Korea is entering the final stage of its economic hardship period.
Referring to the issue of people's living costs and consumption, Minister Choo Kyung-Ho noted that although global energy prices have stabilized, it will take "many years" for state-owned enterprises to overcome deficits.
South Korean utility prices rose 23.2 percent in May from a year earlier, amid continued uncertainty over global energy supplies due to the Russia-Ukraine conflict, prompting the Korea Electric Power Corporation to raise prices.
South Korea is heavily dependent on imported energy sources. Finance Minister Choo Kyung-Ho also expressed hope that domestic food manufacturers will adjust prices of products, including instant noodles, to match the current global wheat flour prices.
Minister Choo-Kyung Ho also affirmed that the government does not need to consider a supplementary budget for 2023, despite calls from the main opposition Democratic Party (DP).
The Bank of Korea (BoK) is now one of the first central banks in the world to pause interest rate hikes. The BoK's Monetary Policy Committee decided to keep the base rate unchanged at 3.5%. The bank raised the base rate seven times in a row from April 2022 to January 2023, then froze it in February.
Earlier, the BOK cut its 2023 economic growth forecast for South Korea to 1.4% from 1.6%. Meanwhile, officials maintained their forecast for the consumer price index to rise 3.5% this year as core inflation persisted longer than expected.
Minh Hoa (according to Lao Dong, BĐT Communist Party of Vietnam)
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