Surging Gold Bar Sales from Vending Machines
South Koreans can now easily buy gold out of vending machines placed at convenience stores, a trend that is gaining popularity due to concerns over inflation and value appreciation. According to local media, GS Retail, the company that operates these convenience stores, reported $19 million worth of gold bar sales in the nine months ending May.
Expansion of Gold Vending Machines
GS Retail first introduced gold dispensing vending machines at five of their stores in September and has since expanded to 29 stores. By the end of this year, they plan to deploy these vending machines in 50 stores. In total, GS Retail oversees more than 10,000 convenience stores across South Korea. The machines offer gold bars in five different weights, with the smallest one being the most popular and costing around $225.
Convenience and Popularity
Customers in their 20s and 30s appear to be the main buyers, with many turning to gold as an investment vehicle in times of rising value. Inha University Professor Lee Eun-hee suggests that the popularity of these gold bars is largely due to the convenience of buying them from vending machines at convenience stores, making it more of a fun experience rather than a serious investment.
South Korea’s Central Bank Approach to Gold
Despite the domestic popularity of gold, South Korea’s central bank has adopted a more cautious approach to gold buying, preferring the liquidity of the U.S. dollar. The Bank of Korea (BOK) maintains its U.S. dollar liquidity during times of high recession risk and geopolitical uncertainties, expressing concerns about the direction of gold prices and noting that gold has already rallied quite a bit, potentially peaking or becoming difficult to sell for liquidity purposes.