Bank of Korea Reenters Gold Market After 13-Year Absence

The Bank of Korea has resumed gold allocation in its reserve asset portfolio after a 13-year hiatus. In a regulatory filing on August 13, it was revealed that the central bank held over $250 million worth of shares in the SPDR Gold Trust ETF as of the end of the second quarter.

This marks the first significant purchase of gold by the BOK since 2013, when it bought 20 tons of physical gold. The current allocation is valued at around $400 per share and represents a substantial increase from the bank's previous holdings.

The decision to allocate gold in its reserve portfolio comes as part of a broader effort to diversify and hedge against geopolitical and inflation risks. The BOK has announced plans to purchase domestically produced bullion from South Korean manufacturers, including LS MNM and Korea Zinc, with an initial scale limited to 4-5 tons per year.