Why will the demand for gold skyrocket in South Korea?

South Korea has never been associated with the precious metal as the demand was never outstanding there. However there have been some changes in the country lately, as Reuters reported.

The World Gold Council reported that last year the demand for gold in South Korea was 17 tons, leaving a total of 800 tons of gold in the reserves of the country. The general manager of Korea Gold Exchange 3M Co analyzed the domestic market and came up with the conclusion that this year purchasing power has increased, and therefore people can afford the purchase gold worth 1 billion Korean won ( 780 million euros), equal to 24 tons of gold. The expert believes that sales could rise by more than 40% in comparison to the previous year.

Global InterGold: Why will the demand for gold skyrocket in South Korea?

The general manager of the company points out that the number one reason for the growing demand is lower deposit interest rates. People prefer the yellow metal to stocks and real estate, as gold is a highly liquid asset.

The Asian financial crisis hit gold prices leading people to sell their gold. Unfortunately for them gold prices took soon the opposite direction making unaffordable the purchase of their previous gold reserves. Therefore, now the South Korea people have started to buy small sized gold bars to profit from the constant growth.

The inhabitants of South Korea have chosen the right moment for buying gold, as gold prices will keep growing. The famous gold market analyst, Peter Schiff, pointed out that the two main reasons which are pulling gold prices down are a strong U.S. dollar and the expectations of interest-rate hike by the U.S. Federal Reserve, through they will soon stop this negative influence.

Share this news about gold in your social networks!