[Young journalist Hansae Jung] Domestic gold prices have surpassed 1 million won per don (3.75g) for the first time ever. As global geopolitical risks overlap and strengthen the safe-haven mentality, investment demand for gold is rapidly increasing.

According to the Korea Gold Exchange on the 23rd, the consumer purchase price of one don of pure gold was recorded at 1,009,000 won as of the 21st. Gold prices, which were around 530,000 won in January last year, climbed past 600,000 won in March and 700,000 won in September, entered the 900,000-won range earlier this month, and within just a few days surpassed the 1-million-won mark for the first time on record. The increase over roughly one year is nearly 90 percent.

International gold prices are also continuing their rapid increase. The previous day, global gold prices exceeded USD 4,800 per ounce and peaked as high as USD 4,885 intraday, repeatedly setting new all-time highs.

Market observers attribute the increase in gold prices to compounded geopolitical instability. Following political turmoil in Venezuela and Iran earlier in the year, recent tensions between the United States and the European Union, sparked by the U.S. President Donald Trump’s proposal to “annex Greenland”, are seen as further intensifying safe-haven demand.

Although President Trump suddenly withdrew his plan on the 21st (local time) to impose tariffs on eight European countries, appearing to ease tensions, the broader uncertainty remaining in markets continues to drive funds into the gold market.

This trend can also be found in financial products. The net asset value of Korea’s first physical gold exchange-traded fund, the “ACE KRX Physical Gold ETF,” has recently surpassed 4 trillion won, reflecting growing demand for safe assets.

Silver prices are rising as well. As of the previous day, silver was trading at a purchase price of 22,180 won and a selling price of 15,610 won. Since more than half of silver demand comes from industrial uses, such as electrical and electronic components and solar power, analysts note that a combination of supply shortages and expanding industrial demand is sustaining upward pressure on prices.

However, experts caution individual investors to pay attention to the gap between buying and selling prices. While the purchase price of one don of pure gold exceeds 1 million won, the selling price ranges from about 807,000 to 808,000 won, creating a spread of more than 160,000 won.

This gap is due to the 10 percent value-added tax imposed at purchase, as well as fabrication costs for gold bars, transportation costs, and distribution margins. Industry insiders explain that “generally, when buying gold, you should expect additional costs averaging around 15 percent compared to the selling price.”

The recent spike in gold prices has also increased selling volume, which is putting downward pressure on purchase prices. As selling demand rises, some outlets have begun buying gold at prices slightly below prevailing market rates.

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