Gold Prices Impact Korean Rituals

Gold has always been central to Korean culture, traditionally marking significant life events like births, marriages, and other important milestones.

However, skyrocketing gold prices are forcing a reevaluation of these customs, leading to reductions and substitutions in traditions that were once commonplace.

As of Thursday, the spot price of gold in Korea was around 245,000 won ($168) per gram, an approximate 80% increase from 138,000 won a year prior, according to the Korea Exchange. Before a recent dip, gold had reached a peak of 269,810 won.

Looking at the broader picture, the rally is even more pronounced. Gold prices have more than tripled in the last five years and are now over five times higher than they were a decade ago.

Faced with these soaring costs, Koreans are increasingly moving away from gold during important life celebrations, reconsidering traditions in response to the financial burden.

The first birthday of a baby is a major celebration in Korea, traditionally involving showering the child with gold jewelry, most notably gold rings known as dolbanji.

These rings typically contain 3.75 grams of 24-karat gold. However, with today’s elevated gold prices, the 3.75-gram standard is proving increasingly expensive, costing around 1.1 million won – a significant sum to spend on a ring for a one-year-old.

“Ten years ago, the ring cost roughly 200,000 won, a manageable amount for family and friends to gift to babies. Now, it costs more than 1 million won, making it overwhelming for both givers and recipients,” said a gold vendor in Jongno, central Seoul, a district famous for its jewelry stores.

She added that some are opting for 1.875-gram alternatives. Many stores now offer rings with half the amount of gold, or even just 1 gram, maintaining the symbolic value while reducing the price.

“When I bought a ring for my nephew last year, I was surprised by how expensive it was. Now, with my friend’s son’s birthday coming up, the price has doubled. I will just give cash instead,” said Kim Dong-hyun, an office worker in his 30s.

This dilemma is shared by both gift-givers and those who have previously received gold. With gold ring prices having doubled or even tripled recently, people are debating how to reciprocate when their turn comes.

Should they repay based on the price at the time of the original gift or at current prices? Simply returning the original ring feels insufficient.

“When I received a gold ring for my son’s birthday, it was worth around 500,000 won,” said a mother who celebrated her son’s first birthday last year. “To buy the same ring now, I would need to spend more than 1 million won. Now that I think about it, I wish I had not received the rings in the first place.”

Even newlyweds are forgoing gold. Like many cultures, Korean weddings have historically been a time for extravagance, especially concerning gold.

The yemul tradition involves the families of the bride and groom exchanging gifts, often including gold bracelets, gold bullion, and even golden toads and turtles representing wealth and good fortune. However, soaring gold prices are making yemul a thing of the past.

“The practice was already declining due to changes in marriage culture, but with gold prices this high, we are planning to replace it with cash,” said Kim Eun-jeong, an office worker in her 30s, who is getting married in May.

She had initially considered preparing the “three yedan musketeers.” Yedan refers to gifts traditionally given by the bride’s family to the groom’s, similar to a dowry. The trio – bedding, tableware, and silver cutlery – is considered a modern version of the custom.

However, along with gold, silver prices have also surged.

“Some of my friends who married before me skipped yemul but still prepared the trio. But even silver prices have skyrocketed, and I am torn over whether to prepare the set or not,” she said.

Wedding bands, long seen as symbols of commitment, are also becoming a financial burden. Luxury jewelers like Cartier, Bvlgari, and Tiffany, popular choices among couples globally, including Korea, have been raising prices, citing increased gold costs, further straining wedding budgets.

Instead of luxury brands, some couples are choosing lesser-known jewelers and simpler gold rings, valued not only as symbols of marriage but also as long-term assets. When it comes to selling, rings made of purer gold often fetch higher prices than those from premium brands.

“Of course, we are not buying the rings with the intention of selling them,” one bride-to-be said. “But it still feels reassuring to own something that holds its value. After all, gold has always been a reliable investment.”

Gifting gold to long-serving employees was once a common token of appreciation, but rising gold prices have made it unaffordable for many companies.

In the pharmaceutical sector, companies like GC Pharma and Seegene have reportedly discontinued gifting gold to employees based on years of service, opting for direct cash payments instead.

“While not always tied to years of service, many companies occasionally expressed gratitude to employees with gold gifts,” said a recent retiree.

“Over my 30-year career, I received small gold items, like business cards and pins. That seems like a story from the past now.”

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