The Bank of Korea (BOK) has made its first gold investment in 13 years, but falling global gold prices have led to a significant drop in the valuation of its holdings. According to a report filed with the U.S. Securities and Exchange Commission (SEC), the BOK held 956,869 shares of the SPDR GOLD TR exchange-traded fund (ETF) at the end of the third quarter. The BOK acquired 679,765 shares in the second quarter and added 277,104 shares during the third quarter, valuing the position at $364.41 million (about 488.3 billion won) based on prices at the time.
However, international gold prices declined in the fourth quarter, causing the SPDR GOLD TR price to fall as well. The BOK's average purchase valuation per share was $380.84 at the end of the third quarter, but the U.S. market close on the 13th of this month was $355.45. If the BOK maintained its holdings unchanged, the valuation would drop to $340.12 million (about 455.7 billion won), a decrease of roughly 32.6 billion won. The disclosure did not specify whether there was an actual loss or its size.
The SEC filing also revealed that the Bank of Korea increased its investments in U.S. index ETFs. Its holdings of the iShares Core S&P 500 ETF, which tracks the U.S. Standard & Poor's (S&P) 500 Index, rose from 1,752,811 shares to 2,060,681 shares. Additionally, its holdings of the Vanguard S&P 500 ETF increased from 1,923,442 shares to 2,203,142 shares.