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Falling gold prices revive old tradition
By Kim Tae-jong
The tradition of giving gold rings as a first-birthday gift to infants has made a comeback because the price of the precious metal has continued on a downward spiral this year.
The tradition dwindled over the past several years amid soaring gold prices, and guests invited to parties for first birthdays resorted to alternative presents such as giving cash.
According to the London Bullion Market Association, the gold price per ounce is $1,232 as of Dec. 13, about a 30 percent drop from the price earlier this year.
Gold prices per “don,” a Korean measure equivalent to 3.75 grams, also dropped to around 160,000 won early this month, down from 220,000 won in January.
The drop in gold prices has consequently stimulated the market for gold and revived the customary presentation of the rings to the infants as a gesture intended to wish them good fortune and health.
According to online shopping site G Market, the sales of gold rings designed for first birthday parties soared by 270 percent in November, compared to the same period last year, whilst sales of gold bars also jumped by 338 percent.
Another online shopping site Auction also said that sales of gold products such as rings and bracelets jumped 130 percent in the cited period.
“Customers buy gold rings to take them to first birthday parties while there are also demands for gold bars because people seem to believe owing gold can be a good investment,” an official from G Market said.
But market insiders are not optimistic about investment in gold due to its decreasing value, saying the excitement over the price of gold has started to fade.
The price of gold is expected to fall further especially because the global economy has begun to show signs of recovery.
Recent U.S. economic data is also showing a better than expected performance and the U.S. Federal Reserve is preparing to exit its bond-purchasing program.
“The gold price will not drastically increase in a short-term perspective,” Son Hyun-jae, an analyst at KDB Daewoo Securities, said. “But the bottom line would be around $1,100 (per ounce), because there seems to be steady demand for gold in India and China.”