October 17, 2025
SEOUL – Gold prices in South Korea have surged past global levels, reviving the “kimchi premium” as investors rush to snap up the safe-haven metal amid surging demand and tight supply.
The spot price of a 1-kilogram gold bullion closed at 227,000 won ($160) per gram on Wednesday on the KRX Gold Market. The Korea Exchange, the country’s bourse operator, manages the gold bourse, where the precious metal is traded like an equity.
According to data provided by the KRX, the international gold price stood at 191,470 won per gram on the day when converted into local currency, showing a price gap of over 18.56 percent. During intraday trading, the gap widened to as high as 20.5 percent.
The KRX uses the LBMA Gold Fixing price, operated by the London Bullion Market Association, as its indicator of the international price.
While global preference for the safe-haven asset has been soaring amid heightened economic uncertainties, with international gold futures surpassing an all-time high of $4,200 per ounce, domestic supply has struggled to keep up with demand, fueling a market overheating.
The recent strengthening of price discrepancy is similar to that of February, when the gap between gold prices in Korea and international markets rose to over 20 percent — the highest since the KRX Gold Market opened in 2014.
The recent surge in differentials stems from the KRX Gold Market’s structure, which requires quality certification from the Korea Minting and Security Printing Corp. and custody through the Korea Securities Depository.
The procedure leads to delays in increasing the supply of physical gold, thereby pushing investment demand above the availability.
The lack of an active futures market for gold is pointed out as another reason behind the unusually wide spread.
“Gold futures trading is less active compared to the spot market, making arbitrage between the two markets challenging,” one analyst said, noting that futures trading can help guide the pricing of underlying assets.
The recent surging demand for gold has led to a shortage of gold bullion on the domestic market. Major gold retailers have halted the supply of certain gold bullion products, citing a lack of supply.
The Korea Exchange issued warnings in both September and October, urging investors to exercise caution and noting that “the inflated gap between KRX gold prices and international prices should be taken into consideration.”
Earlier this year, after reaching a peak of over 20 percent marked on Feb. 14, the domestic premium quickly fell to near zero when domestic gold spot prices dropped by about 19 percent within two weeks. Even earlier this month, domestic gold spot prices fell by 12 percent, cutting the premium from 16 percent in half, before quickly rebounding.
The KRX even postponed its planned marketing event for gold trading, citing concerns that promoting gold purchases would be inappropriate amid an inflated price surge.
“In reality, it may not be easy for investors to pull out of gold amid the current price surge,” DB Securities analyst Kang Hyeon-ki said. “However, they should keep in mind that gold prices could experience significant fluctuations in the future.”
