Bank of Korea Mulls Gold Purchases After 12-Year Pause
South Korea’s central financial institution is considering a return to gold shopping for for the primary time since 2013, signaling a possible shift in its reserve administration technique.
The transfer comes amid rising demand for the valuable metallic, as buyers search safety from inflation and forex weak point.
Bank of Korea Weighs Buying Gold Again
According to the newest data by the World Gold Council (WGC), as of October, the Bank of Korea held 104.4 tons of gold, rating forty first globally. It final added to its gold reserves in 2013, concluding a three-year shopping for spree that started in 2011.
During that interval, the central financial institution bought 40 tons in 2011, 30 tons in 2012, and 20 tons in 2013. Nonetheless, the choice drew home criticism, as gold entered a chronic worth stoop. The financial institution’s timing led to important backlash, contributing to its hesitance to re-enter the market.
Nonetheless, as macroeconomic circumstances deteriorate, inflation accelerates, and currencies weaken, the financial institution is reconsidering its earlier stance.
Heung-Soon Jung, director of the Reserve Investment Division on the Bank of Korea’s Reserve Management Group, introduced the choice on Tuesday through the London Bullion Market Association and London Precious Metals Markets occasion in Kyoto.
“The Bank of Korea plans to contemplate extra gold purchases from a medium- to long-term perspective,” he said.
Jung famous that the bank will monitor the market earlier than deciding when and the way a lot gold to buy. He added that any transfer would rely upon how the nation’s reserves evolve and on the course of gold costs and the Korean received.
Global Central Banks Lead Gold Accumulation
The Bank of Korea’s renewed curiosity in gold comes amid a big redeployment of international reserves. During the primary half of 2025, 23 international locations elevated their gold holdings.
In the second quarter, Poland acquired 18.66 tonnes, Kazakhstan 15.65 tonnes, Turkey 10.83 tonnes, China 6.22 tonnes, and the Czech Republic 5.73 tonnes. Furthermore, BeInCrypto recently highlighted that for the primary time for the reason that mid-Nineties, central banks maintain extra gold than US Treasuries.
Notably, banks are anticipated to purchase 900 tonnes of gold in 2025. The shift highlights eroding confidence in dollar-denominated property amid US fiscal deficits and commerce tensions. Retail investors also mirrored this trend, queuing at sellers to hedge towards forex debasement.
Gold Price Volatility Tests Market Sentiment
Meanwhile, the high international demand pushed gold upwards, reaching an all-time high of $4,381 per ounce final week. However, a correction adopted.
BeInCrypto reported that after the file high, gold plunged 6% in its worst one-day drop in 12 years, erasing round $2.1 trillion in market worth.
The decline has continued, with the gold dropping 8.4% of its worth up to now week. Furthermore, yesterday the downtrend even pushed costs beneath $4,000 per ounce for the primary time since October 13.
Despite this, some market consultants stay optimistic about gold’s comeback. Steve Hanke, an economist, described the decline as a shopping for alternative and forecasted a bull market peak at $6,000 per ounce.
Analyst Rashad Hajiyev suggested that the present drop in gold costs is “wanted” earlier than one other main rally. He views the sell-off as a option to flush out weak merchants and set the stage for a strong transfer towards $5,500–$6,000.
“Gold is a good purchase beneath $4,000, and silver is a fair higher purchase beneath $47. Remember, it was only a week in the past that gold virtually hit $4,400 and silver traded above $54.40. Those highs will seemingly not even be near the peaks of this bull market,” Peter Schiff added.
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