5g of gold every month: will you keep more than in savings?

Want to buy 5g of gold monthly and withdraw a large sum in ten years? Start with what you pay and what you receive when selling, before the gold-price chart. The Korea Gold Exchange's October 10 displayed quote for 24K gold per 3.75g was KRW 795,000 to buy and 682,000 to sell. At that pair of prices, immediate resale returns 14.2% less than you paid; the dealer's buying quote needs to rise roughly 16.6% to recover a single purchase price. Obtain a separate quote for your actual 5g bar.

That hurdle sits between a headline about rising gold and the return you retain. In a ten-year model with a fixed KRW 500,000 monthly budget and a constant spread, even 5% annual gold-price growth leaves less than an interest account assuming a sustained net annual 2.5%. This is different from buying a fixed 5g quantity each month. Rerun the comparison with your own quote and budget.

Fixing 5g changes how much you pay each month

An investor's September 30 question asks whether to follow a friend's monthly 5g fine-gold purchases or use an interest account. Able to afford 10g monthly, the writer also compares 10g each month with 20g every two months. To resolve that choice, start by distinguishing a fixed quantity from a fixed budget.

Suppose, purely for illustration, that gold costs KRW 200,000 per gram: 5g costs KRW 1 million. A 30% price increase raises the cost of those same 5g to KRW 1.3 million. Keeping the monthly budget at KRW 1 million reduces the amount bought to roughly 3.85g. This is an assumed price illustrating fixed quantity versus fixed budget, rather than a product quote.

A plan to buy 5g every month contains a condition: you can contribute more money as gold rises. Comparing with an interest account requires matching the money actually contributed. That is why this article's ten-year comparison uses a fixed KRW 500,000 monthly budget.

The first hurdle is the buying and selling spread

The Korea Gold Exchange's displayed quote is for 24K gold per 3.75g. The purchase price includes VAT; the selling price is shown on the Geumbang Geumbang app basis. This price pair is not an execution quote for a 5g gold bar. The product's manufacturing cost and the seller's repurchase terms can change your starting point.

Paying KRW 795,000 and receiving KRW 682,000 on immediate resale leaves 682,000 ÷ 795,000, or roughly 85.79%. Even if gold stands still, about 14.21% separates the purchase and sale amounts. Adding 10% VAT again to a purchase quote that already includes it counts the tax twice.

Recovering a single purchase requires the current buyback quote to rise by 795,000 ÷ 682,000 − 1, or about 16.57%. A 14.2% rise cannot close the 14.2% gap because the amount rising starts at the smaller KRW 682,000. Different future repurchase terms change this hurdle.

Compare ten years using the same monthly budget

The model pays KRW 500,000 at each month end for 120 months, then liquidates immediately after the last payment. Total contributions are KRW 60 million. It divides the displayed quote into a per-gram price and allows fractional quantities matching the budget. This differs from actually buying one 5g bar every month. The gold bid/ask ratio stays at 85.79%, with prices moving monthly at each row's constant annual growth rate. The interest account maintains an assumed net annual 2.5%, converted to monthly compounding, with interest reinvested. This is neither a current bank-product quote nor a fixed rate offered for the next ten years.

In this calculation, gold needs roughly 5.52% constant annual price growth to match the account's final cash. The last purchase has no time to grow; the first grows for 119 months, not 120. Multiplying all KRW 60 million by the gold-price increase over ten years treats monthly purchases as one initial lump sum.

For monthly budget B, gold sale proceeds = B × (bid/ask) × Σ(1+g)^(k/12). Here g is the assumed annual gold-price growth and k runs from 0 through 119. The interest account uses monthly rate i = (1.025)^(1/12) − 1 and B × [(1+i)^120 − 1] ÷ i.

Extra product premiums, storage and additional transaction costs are excluded. These are nominal Korean-won amounts, rather than purchasing power after inflation. Real savings depend on the order of price changes, changes in the spread and your product quote. Even at the same final gold price, the number of cheaper purchase months changes how much gold you accumulated.

The strongest countercase: gold is protection, not interest

At 8% annual growth under the same model, gold leaves roughly KRW 9.27 million more than the interest account. Sufficient price growth reverses gold's lower ranking in that model. Finding an actual transaction method with a smaller spread also changes the comparison.

There is also a reason to judge gold by more than return alone. The World Gold Council's diversification research cites a 21% rise in dollar gold prices from December 2007 to February 2009 during the financial crisis. Seeking a different movement from other assets in a crisis is a different aim from maximizing interest income. That dollar-price episode is not a Korean small-bar after-tax return or the result of the next crisis.

Coinian's judgment: if the goal is Korean-won cash in ten years, calculate the growth needed to overcome physical-gold costs first. Direct possession and crisis preparation can provide reasons to pay those costs. Saying that gold rewards long accumulation does not settle the monthly budget or cash-out terms.

5g in an account differs from a 5g bar in your hand

One alternative, the KRX gold market, permits trading in 1g units and physical withdrawals in 100g or 1kg units. Transactions within the account are VAT-exempt; physical withdrawal adds 10% VAT and separate costs. Accumulating 5g in an account and receiving a 5g bar every month produces different holdings and costs.

When comparing a larger bar every two months, do more than assume bigger purchases are cheaper. Match purity and date, then compare the actual purchase price per gram, buyback quote and monthly budget left. That shows manufacturing-cost differences and time money remains committed. A comparison with a KRX account also needs the physical-withdrawal plan on the same basis.

Your next purchase needs your own quote

Before buying, obtain the checkout amount for your actual 5g product and the dealer's repurchase quote for that same product. Buyback quote ÷ checkout amount gives your initial recovery ratio. Rerun the calculation with that ratio and your monthly budget to explain whether your friend's accumulation method fits your decade-long plan.

The events that can change the choice are changes in your actual quote and the date you will convert gold to cash. Lower small-bar costs, or a goal changing from future cash to physical possession, changes the comparison. Updating budget, costs and sale plans is more useful than reacting to next month's price increase alone.

To place gold within the portfolio, also read the overlap between US and world ETFs. If losses in an asset bought for protection are uncomfortable, read what changes when moving from bonds to equities.