BOK Seeks Domestic Gold as Geopolitical Risks Escalate

The Bank of Korea (BOK) has announced plans to purchase domestically produced gold for the first time in 13 years. The central bank will partner with LS MnM Co., a copper smelting and refining company, to make over-the-counter transactions.

The partnership aims to reduce foreign exchange risks associated with previous gold purchases made in overseas markets, which were paid for in US dollars. LS MnM is one of South Korea's two major gold producers, alongside Korea Zinc Co., producing approximately 40-45 tons of gold annually and exporting about 10 percent of that amount.

The BOK will consider purchasing a portion of the gold intended for export through the Korea Exchange (KRX) and the Korea Securities Depository (KSD). The purchases will be made after prior consultations with the companies on price and quantity to minimize the impact on domestic gold prices.