Bank of Korea Resumes Physical Gold Buying Amid Safe-Haven Demand Surge
The Bank of Korea (BOK) has decided to purchase physical gold for the first time in 13 years, amidst rising safe-haven demand. The BOK plans to buy around 1 ton of gold on December 14, priced at approximately 200 billion won.
This move comes after a 13-year hiatus from buying physical gold, during which the central bank invested in stocks due to their relatively high liquidity and solid returns. However, with international gold prices increasing since 2023, there has been growing pressure for the BOK to replenish its gold reserves.
As of the end of last month, the BOK held 104.4 tons of gold, valued at about 20.4 trillion won, which represents around 1.1% of foreign exchange reserves. This is lower than the median of 9% for the top 10 countries by foreign exchange reserves.
A Bank of Korea official stated that 'With the recent expansion of geopolitical risks, gold's role as a safe asset has increased,' adding 'Considering the Bank of Korea's relatively low gold share compared with major countries, we decided to expand the share of gold assets.'