As the Korea Exchange (KRX) allowed overseas gold producers to participate in the KRX gold market, domestic gold suppliers pushed back. The exchange said the move is intended to resolve the "gold premium," in which domestic gold prices run higher than international prices, but the industry argues that opening to foreigners while leaving the domestic supply structure untouched is reverse discrimination.
On the 1st at 1 p.m., about 170 people from the gold distribution industry held a protest in front of the Korea Exchange (KRX) in Yeouido, Yeongdeungpo-gu, Seoul, opposing a revision to the KRX gold market operating rules.
Earlier, the Korea Exchange (KRX) announced revisions to its operating rules and detailed regulations to allow foreign corporations that produce London Bullion Market Association (LBMA)-certified gold bullion to participate in the KRX gold market. Since its launch in Mar. 2014, only domestic players have taken part in the KRX gold market for more than 10 years, but some overseas firms will now be able to enter. The revisions are set to take effect on the 18th of this month.
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The Korea Exchange (KRX) says it aims to resolve the "gold premium," where domestic gold prices exceed international prices, by increasing supply. As demand for gold investment surged last year, domestic gold prices on the KRX gold market at times traded as much as 20% higher than international prices.
The domestic supply industry counters that the issue is not a shortage of supply itself. According to the industry, the volume of gold supplied to the KRX gold market last year was 100 tons (t), more than five times the 22 t in 2024.
The industry argues instead that regulations applied to domestic gold production are blocking supply. Currently, domestic gold refiners must produce an ingot and then separately manufacture a minted bar embossed with a Korea Minting, Security Printing & ID Card Operating Corporation (KOMSCO) die, and in this process, daily output is limited to 40 pieces.
The industry notes that with these constraints still in place, allowing foreign firms to participate in the KRX gold market is "reverse discrimination." While domestic refiners face limits on daily production capacity, imported gold may be accepted as ingots rather than minted bars. Ingots have lower manufacturing expense than minted bars. The industry says if ingots backed by economies of scale are sold, domestic players are likely to be crowded out.
A representative of Korea Gold Exchange, which organized the protest, said, "The purpose of establishing the KRX gold market was to bring underground transactions into the open and increase the inflow of high-purity gold," adding, "Authorities should have first examined why inflows were not sufficient and addressed distribution structure issues." The representative also criticized, "After a single communication on the 3rd of last month with three firms, they notified implementation on Mar. 18," and said, "They rammed it through unilaterally without a briefing session or public hearing."
Regarding this, the Korea Exchange (KRX) said, "We have already conveyed to domestic producers our support for accepting various forms of bullion, including ingots, as long as quality is not compromised," adding, "We plan to continue discussions with the Korea Minting, Security Printing & ID Card Operating Corporation (KOMSCO) on improving the domestic gold quality certification system."