BOK Resumes Gold Investment After 13-Year Drought Through ETF

The Bank of Korea has resumed investing in gold for the first time in 13 years through the Exchange Traded Fund (ETF). The central bank plans to diversify its channels for buying domestically produced gold and expand real gold holdings in the mid- to long-term.

According to the Bank of Korea, gold accounts for only 1.1% of its $47.36 billion foreign exchange reserves as of June this year, or $4.79 billion. The bank has not purchased additional gold since buying 90 tons between 2011 and 2013.

'The recent rise in geopolitical risks has raised central banks' interest in gold,' said Chung Hee-sup, head of the Bank of Korea's foreign capital management. 'We judged that it is necessary to expand our gold reserves due to falling prices.'

The Bank of Korea plans to use trading, settlement, and storage infrastructure of the KRX gold market operated by KRX and KSD to purchase overseas shipments of domestic gold producers based on international gold prices.