The so-called "kimchi premium," in which domestic gold prices are set higher than international rates, is being discussed with the recently trending "Onnuri gold tech" online as a background factor. The method of buying gold at a discount with Onnuri gift certificates issued to revitalize traditional markets and then reselling when a premium forms to pocket the difference has been shared.
Online communities have recently been actively sharing ways to use Onnuri gift certificates and information on stores that accept them. The strategy is to buy gold with certificate discounts (5–10%) when the kimchi premium is low and sell later if the premium rises. In particular, ahead of the Lunar New Year holiday in January next year, there is anticipation that if certificates are issued, the discount rate could expand to as much as 15%, stoking investor sentiment.
Earlier, the Ministry of SMEs and Startups temporarily raised the discount rate for digital Onnuri gift certificates to 15% for one month from Jan. 10, which included the Lunar New Year holiday, and ran a promotion to refund 15% of the payment amount per person, capped at 20,000 won.
Onnuri gift certificates are issued to support traditional markets and small businesses, but gold shops registered as precious metals retailers are also included among the merchants. Some community posts said, "I bought a gold bar with Onnuri gift certificates," and "I purchased one don of gold for the 800,000-won range."
Some argue that this "certificate buying spree," coupled with demand for gold gifts around the holidays, fuels the abnormal overheating in domestic gold prices. The logic is that buying demand using discounted certificates can temporarily surge and affect the distribution price of physical gold.
Analysts say that if gold is purchased with Onnuri gift certificates when the kimchi premium on domestic gold prices is under 1%, one can expect both trading gains from price increases and the premium effect when selling after a premium forms.
However, it is assessed that gold transactions using Onnuri gift certificates have a limited impact on overall domestic gold prices. There are not many gold shops where the certificates can be used, and the transaction amounts are not large compared with the total size of the physical gold market.
An official at the Ministry of SMEs and Startups said, "We are aware of the controversy and have continuously monitored the share of Onnuri gift certificate payments compared with monthly transaction amounts in the gold market from January to September this year," adding, "During the Lunar New Year period, the share was relatively high at 1.9%, but afterward it fell sharply to around 0.4%." The official added, "It is hard to see Onnuri gift certificates as having a meaningful impact on how domestic gold prices are formed."
The official also noted, "Through a law revision last month, franchisees with annual sales of 3 billion won or more are set to be excluded from using Onnuri gift certificates starting next year," adding, "Currently, due to budget exhaustion, the Onnuri gift certificate discount rate has fallen to the 0% range, and the purchase limit has been reduced to 1 million won."