Korea's Central Bank Joins Long-Term Gold Buying Program
South Korea's central bank has started buying spot gold exchange-traded products as part of its long-term strategy, according to Jeong Hee-sup, head of the Bank of Korea's Reserve Management Group.
The purchases are a result of growing interest in gold as a safe-haven asset among central banks due to geopolitical risks. The bank has established a framework to purchase domestically produced gold through a cooperative system involving the Korea Exchange and domestic gold producer LS MnM, with an estimated 4-5 metric tons of gold being produced annually for export.
The Bank of Korea plans to gradually increase its share of gold according to medium- and long-term needs, rather than making large purchases at once. Jeong said that gold's role as an inflation hedge and alternative to the US dollar makes it a viable asset from a medium- to long-term perspective.