Bank of Korea Reenters Gold Market After 13-Year Absence

The Bank of Korea has ended its 13-year hiatus from buying physical gold and will purchase 4-5 tonnes per year, a tiny fraction of South Korea's annual production. The central bank had previously bought 90 tonnes between 2011 and 2013 at an average price of $1,629 per ounce, but the investment suffered a significant loss when gold prices fell by 38.5% in 2013.

At its peak in 2026, those same 90 tonnes would be worth around $11.8 billion, more than double what Korea paid. Jung Hee-sub, who runs the Reserve Management Group at the Bank of Korea, said that the decision to buy gold was based on market conditions and not influenced by recent price drops.

Central banks globally have been actively buying gold, with a record 289 tonnes purchased in the second quarter. Poland led the way with 51 tonnes, while China added 33 tonnes and Russia sold 22 tonnes. Analysts predict that gold prices will rise to around $4,700 by year-end, although some experts caution that central banks may not be able to push prices up on their own.