South Korea remained a gold seller for the third year in succession despite being a paultry producer of the yellow metal.Country's central bank, the Bank of Korea (BOK) said the balance of trade in non-monetary gold was valued at a surplus of $1.59 billion last year, up from $1.5 billion a year earlier.
Non-monetary gold covers exports and imports of all gold not held as foreign reserve assets. In 2012, the country exported a total of 43 tons of gold and imported 13 tons.About 27 tons were exported to Hong Kong. The 2012 data marked a surplus for the fifth consecutive year since 2008 when a net outflow of gold reached $31.6 million.
Analysts said country’s trade surplus in gold rose in 2012 for the third consecutive year as more South Koreans secured sales of the precious metal amid an international price rally.
They added that Korea has maintained the status of a net gold seller since 2008, unusual for a country that produces only a few hundred kilograms of gold annually.
According to analysts as the price rose, more South Koreans took out gold from the closet and sold it and Korean firms exported more gold products after reprocessing imported gold.
The trade in gold remained in the red every year until Korea recorded a surplus worth $2.38 billion in 1998 when South Korea was among nations hit by the Asian financial crisis.
At the time, Koreans queued up to sell their gold jewelry after a nationwide appeal was made by the government for help to bail out the country, then reeling from a severe shortage of foreign currency reserves.BOK officials believe the gold trade volume is much larger because a large amount of gold is being smuggled in and out of the country.
In a sense, the gold trade surplus is not very welcoming because the value of the metal tends to increase during a financial crisis. In contrast to the net outflow of non-monetary gold, the BOK has raised its gold holdings to diversify its foreign reserves since 2010.
The central bank bought 20 tons of gold last month, raising its gold holdings to 104.4 tons, valued at $4.79 billion.The additional purchase of gold put the nation in 34th place in the world in terms of gold holdings, up from 36th at the end of November last year.Gold accounts for 1.5 percent of total reserves at the central bank as of the end of February, up from 1.2 percent the previous month. - BULLIONSTREET.COM