Friday, May 21, 2010

South Korea Accumulates Gold Surplus For Significantly Long Time

As reported by the Korea Times, gold inflows into the country (not counting the Korean central bank's holdings) have been positive for an unusally long 18 months:
The nation's gold account posted a surplus for the 18th straight month in March as global demand for the precious metal has been on the rise with investors flocking to safe assets in the wake of the global financial crisis.

The Bank of Korea (BOK) said Friday that the gold account, which excludes gold holdings by the central bank for foreign reserves, has been in positive territory from October 2008 until March this year. The accumulated surplus during the period reached $2.19 billion (2.60 trillion won).

This is a very rare phenomenon as the gold account used to be in negative territory, meaning that the county sees more gold flowing in rather than out.

Analysts attribute the current phenomenon to rising demand for gold as a safe haven.

According to them, gold prices have been soaring due to growing uncertainties over the financial markets triggered by Southern Europe's debt crisis.

"Recently, investment-related gold demand has been growing faster than that for jewelry or industry," an economist said.

Before the on-going surplus, Korea had mostly run into red figures within the gold trade....

It isn't just Indian and Chinese buyers in Asia who are moving into gold in a big way.

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