Plunge in gold prices leads to popularity in gold products in Korea

All that glitters might be gold, but the price
of the precious metal has taken a massive hit this year, tumbling a staggering 25 percent.
Despite the downward trend, the chance to buy gold at what some see as a knockdown price
has sparked a gold rush here in Korea. Kwon Soa reports. To buy, or to sell.
That is the question these days when it comes to gold.
Right now in Korea the clear answer to that question is to buy.
And consumers are. “With Christmas and New Year coming up, many
seasonal products are being released. Goldbars and seasonal pure gold products are selling
well.” With global demand dropping to a four-year
low, Korean gold prices have plunged as well. The price fell from roughly 44 U.S. dollars
a gram in September to 39 dollars this month. At the beginning of the year, the price was
56 dollars. Compared to last year, gold can be purchased
at rates that are 30 percent cheaper. In 2011 the price of gold hit a record high
of 67 U.S. dollars, which is about 40 percent higher than the current figures. In one jewelry shop in central Seoul’s Jongno
district, 10 first-birthday rings are sold each day, a drastic jump from years ago, when
it was just two rings a day on average. Twenty-four karat rings are a traditional
gift for Korean babies on their first birthdays, and their lower price tags these days are
enabling more people to afford them. So why did the gold price drop this far? “The biggest reason for the drop in the price
of gold is the beginning of the drawdown of quantitative easing, meaning it depends on
whether the U.S. dollar is strong or weak.” Economists say due to expectations that the
Federal Reserve would begin tapering its quantitative easing program, the price of gold had dropped
in recent months. They add that Wednesday’s announcement by
Fed chief Ben Bernanke did not result in drastic changes in global gold prices. Experts say there is a chance that gold prices
will drop further in 2014, but that they will stay in the range of 1-thousand-2-hundred
dollars per ounce for the time being. Kwon Soa, Arirang News.

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