Gold Investor

The country that ranks amongst the 15 largest economies in the world and a powerhouse in Asia, will just now start to trade physical gold on the open market. The South Korean regulators first announced this move in mid-2013 and starting tomorrow, the Korea Exchange Inc. bourse will begin trading 1 kilogram bars of 99.99% gold (in minimum 1 gram increments). This spot gold trading will come in addition to trades in gold futures contracts that are already established in South Korea. This move is expected to move some of the underground trade in gold to the official exchange and bring additional (tax) revenue for the government.


The South Korean central bank is estimated to have foreign exchange reserves of around $350 billion including 104 tons of gold. The South Korean population holds about 700 tons of gold and it is estimated that about 70 tons of physical gold was being bought and sold in Korea per year (without any import duties or taxes being paid on it). So it will be interesting to see how this opening of gold trading impacts the commercial and personal buyers of gold (who will be able to buy through registered brokers) and whether they would be willing to pay the 10% tax levied on gold by the South Korean government.

It would appear that a 3% import duty is being waived for trading in this new market. South Korea does not seem to have significant gold mining operations at home (there is some gold mining in North Korea) so its only sources of the precious metal are either gold recycling or imports.