Korea Exchange Targets Gold Trading as Park Hunts Tax Revenue Korea Exchange Inc. said physical gold trading would begin on March 24 as Park Geun Hye’s government seeks to wring tax revenue out of a market that is dominated by illegal transactions. Trading bullion of 99.99 percent purity will start on a test basis from Feb. 10 to March 21, the bourse said in a statement today. The exchange will use units of 1 gram to spur liquidity and delivery will be in 1 kilogram bars, it said. South Korean individuals hold seven times more gold than the 104.4 metric tons in the central bank’s vaults and the majority of trading is on the black market to evade import duty and value-added tax, according to government estimates. Park, who marks the one-year anniversary of her election as president this month, scaled back welfare pledges in September as her administration forecast the first drop in revenue in four years. “It’s a positive move to combat the underground market,” said Johnston Bae, a director at Eugene Investment & Futures Co. in Seoul. “The timing is good as gold prices fell this year, offering cheaper entry levels for physical buyers.” Gold climbed off a five-month low today, following the biggest one-day drop since October yesterday, as investors assessed whether the U.S. economy was strong enough to warrant a reduction in monetary stimulus. Bullion, which lost 27 percent this year and is on course for its first annual drop in 13 years, rose 0.3 percent to $1,222.95 an ounce at 3:46 p.m. Seoul time. Asia’s fourth-largest economy, which already has gold futures trading on Korea Exchange, has been mulling plans for a physical bullion market since at least 2010. bloomberg/news/2013-12-03/korea-exchange-targets-gold-trading-as-park-hunts-tax-revenue.html
Posted on: Tue, 03 Dec 2013 08:19:48 +0000
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