Light and affordable, tiny gold products emerge as alternatives to gold bars, gold ring gifts
Feeling FOMO about the soaring price of gold in South Korea? For retail investors attracted to gold but weighed down by its sky-high prices, the typical investment size is shrinking. Now, tiny gold nuggets as small as a pea are the latest sensation in the local jewelry scene.
Dubbed "kongal geum" in Korean, which roughly translates to bean-sized gold, they are gold pieces weighing 0.5 to 1 “don” (1.87 to 3.75 grams). A don is a traditional Korean unit of weight commonly used to measure gold and other precious metals.
Online jewelry mall “Bante" reported orders for the small gold nuggets more than doubling this month from the previous month.
"When we open orders, around 1,000 orders surge in the first 25-30 minutes of each round,” a company official told The Korea Herald. Bante has been selling gold nuggets by holding scheduled online pre-order rounds.
Most of the buyers are in their 30s and 40s, likely seeking to use gold as a form of wealth management, the official explained.
"Because of unstable gold prices and supply issues, we haven’t been able to offer products as often. With limited stock, things tend to sell out fast."
South Korea has seen a shortage of gold bars recently as demand surged in line with a global flight to safe-haven assets.
The domestic price of gold surged to a record high of 156,200 won ($108) per gram on Feb. 11, according to the Korea Exchange, marking the highest level since the gold market opened here in March 2014.
While gold bars are the standard medium in gold investment, their supply in domestic markets has been unstable. Last week, the Korea Minting and Security Printing Corp temporarily halted sales of gold bars due to problems with sourcing supply. Gold bars come in various weights, with the most widely traded in South Korea being those weighing 10 dons (37.5 grams).
The 1 gram gold nuggets trade at a price of between 150,000 and 200,000 won on online marketplaces, rising as an alternative to costly gold bars.
Kim Sang-eun, 41, a housewife in Seoul who has been collecting gold nuggets every year for her children, said, "They are easy to collect without much financial burden, and when placed in a jar, they look cute, making for a great interior decoration. It's a fun way to invest."
The tiny gold comes in a range of shapes, such as hearts, bears, stars, four-leaf clovers, and golf balls. Many buyers have shared photos on Instagram of the small gold nuggets displayed in clear acrylic frames.
They are also rising as an alternative to the gold ring gift for "doljanchi," a traditional Korean first birthday celebration, which includes a feast table adorned with a variety of foods and flowers.
One online user who recently attended a doljanchi for her friend's daughter said, "A 1 don gold ring was too expensive, so I bought a 0.5 g gold nugget for around 120,000 won as a gift. It was a meaningful yet budget-friendly gift that didn’t put too much pressure on my friend."
Local experts predict that gold prices will remain high for the time being.
Kim Jeong-sik, an economics professor at Yonsei University, said "With an abundance of money in circulation and interest rates on the decline, the upward trend in gold prices is likely to persist for now."
cjh@heraldcorp.com
