Bank of Korea Resumes Gold Buying After 13-Year Hiatus

Central bank initiates first domestic gold purchase in over a decade via OTC channels to diversify reserves and mitigate geopolitical risks amid stable total holdings.

Woofun AI reports that the Bank of Korea announced its first domestic gold acquisition in 13 years, collaborating with LS MnM Company, the Korea Exchange (KRX), and the Korea Securities Depository (KSD). The central bank aims to utilize KRX trading systems and KSD storage facilities to purchase gold intended for export, driven by heightened geopolitical risks and the need to diversify foreign exchange reserves.

The Bank of Korea stated it will negotiate price and quantity beforehand to limit domestic market impact, reducing foreign exchange exposure compared to previous US dollar-denominated overseas purchases. While gold holdings remained at 104.4 tons as of July, the central bank noted small-scale gold ETF purchases in the second quarter. Korea's total foreign reserves stood at $427.36 billion at the end of June, including $4.79 billion in gold.