Gold Rush and Dollar Hoarding: Koreans Bet Against Weak USD

The recent weakening of the US dollar has triggered significant shifts in Korean investment patterns, with major banks reporting surging dollar deposits and record-breaking gold banking balances.

As of April 21, 2025, these twin phenomena reflect growing confidence among Korean investors that the greenback’s slide may continue—prompting a strategic pivot toward both foreign currency holdings and precious metals.

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Record-Breaking Dollar Deposits Amid Currency Volatility

Dollar deposits have surged as investors capitalize on the weakening USD to KRW exchange rate, creating opportunities for future currency gains.

The five major Korean banks (KB Kookmin, Shinhan, Hana, Woori, and NH) reported dollar deposit balances of $60.74 billion, marking a 4.7% increase from $58.02 billion at the end of last month
This trend directly correlates with the won-dollar exchange rate, which recently hit 1,484.10 won—the highest level since the 2009 financial crisis
Historically, dollar deposits tend to increase when the won-dollar exchange rate falls, suggesting investors are strategically positioning for potential currency appreciation

Gold Banking Balances Double Since 2023

Korean investors have dramatically increased their gold investments through banking services, reflecting growing demand for traditional safe-haven assets.

Combined gold banking balances at KB Kookmin, Shinhan, and Woori banks reached an all-time high of 1.0649 trillion won ($717.5 million at current exchange rates)
This represents a remarkable 100% increase from April 2023, when balances stood at 523.9 billion won
Gold banking services, which allow customers to buy and sell gold through standard bank accounts, have gained popularity as an accessible entry point to precious metal investments

International Gold Prices Hit Unprecedented Heights

The global gold market has experienced a historic bull run, supporting the domestic investment enthusiasm.

International gold prices first surpassed $3,000 per troy ounce on March 15, a significant psychological threshold
By April 17, prices reached an all-time high of $3,350 per troy ounce, demonstrating sustained momentum
These record-breaking international prices have fueled domestic interest in gold as both an inflation hedge and portfolio diversifier

Strategic Investment Implications

The dual surge in dollar deposits and gold banking reflects sophisticated investor strategies during currency volatility.

Korean investors are increasingly diversifying their portfolios beyond traditional domestic assets
Financial institutions are expanding their foreign currency and precious metal offerings to meet growing customer demand
These trends suggest a collective market view that the dollar’s weakness and economic uncertainty may persist in the near term

As global financial markets continue to navigate through uncertain waters, these investment shifts highlight how Korean investors are adapting their strategies. Whether these trends represent temporary market reactions or the beginning of a more permanent shift in investment behavior will depend on both global monetary conditions and domestic economic policies in the coming months.