Bank of Korea Just Bought Gold After 13 Years: Is a New Rally Coming?
The Bank of Korea will purchase bodily gold once more after 13 years. Central banks purchased 289 tonnes within the second quarter, their strongest second quarter on report.
Gold traded close to $4,086 an oz on Tuesday, up 0.8%. It sits 27% beneath its January report. It continues to be up about 20% on the yr.
Korea Gold Purchases Resume After 13 Years
Seoul stopped shopping for gold in 2013. It was mocked for the timing. The financial institution purchased 90 tonnes between 2011 and 2013, at a mean $1,629 an oz. That got here to about $4.7 billion, figures from Korea Economic Daily present.
Then gold fell aside. The worth had peaked at $1,920.30 in September 2011. By June 2013 it hit $1,180.71, a drop of 38.5%. That yr was gold’s worst since 1981.
At that low, Korea’s gold was price 27.5% lower than it paid. Lawmakers dragged in then-governor Kim Choong-soo. By 2015 the paper loss reached about 1.8 trillion gained. Buying stopped.
Here is the twist. Those similar 90 tonnes at the moment are price roughly $11.8 billion. That is $7 billion greater than Korea paid.
So the financial institution is cautious about the way it explains itself. Jung Hee-sub, who runs its Reserve Management Group, denies any hyperlink to the current worth drop.
“We didn’t determine the timing of purchases by taking a look at a particular worth… we determine whether or not to proceed at the moment based mostly on home and worldwide gold costs and market situations,” native media reported.
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The plan itself is tiny. Korea digs up 40 to 45 tonnes a yr, largely as a leftover from smelting copper and zinc. Only 4 to five tonnes get bought overseas. The financial institution will bid for that slice alone.
So its reserves keep close to 104.4 tonnes, rating Korea thirty ninth. It additionally purchased its first gold exchange-traded funds (ETFs) final quarter, as South Korea’s equity turmoil grips policymakers.
Central Bank Gold Buying Hit a Record 289 Tonnes
Korea is late to a crowded celebration. Central banks purchased 288.9 tonnes within the second quarter, World Gold Council data present. That is 62% greater than a yr earlier.
Poland purchased essentially the most, at 51 tonnes. Its stockpile hit a report 632 tonnes. It needs 700.
Governor Adam Glapiński is blunt about how he does it.
“We’ve been persistently shopping for gold, taking benefit of the current worth drops.”
China added 33 tonnes, maintaining a long buying streak. Russia bought 22.
The rebound hides a gradual begin, although. Just 56.5 tonnes got here within the first quarter. At 345 tonnes, the primary half was the weakest since 2022.
They should not shedding curiosity. A report 45% plan to purchase extra inside a yr, and demand held firm by means of the value hunch.
Gold Is Quieter Than at Any Time Since August 2025
Bollinger Bands monitor how broadly a worth swings round its common. When they squeeze collectively, the market has gone quiet. Quiet markets not often keep quiet.
Barchart figures present the tightest squeeze on the largest gold ETF since August 2025. That date issues. Gold closed August 2025 close to $3,443, then ran 62% to its January peak.
One instance just isn’t a sample, nonetheless. A squeeze tells you a transfer is coming. It doesn’t inform you which method.
So Will Gold Break Out?
The proof leans up, however not again to January’s report. Deutsche Bank analysts Michael Hsueh and Bryant Xu say gold is worth about $4,700 by yr finish. JPMorgan’s lowered target nonetheless places the fourth quarter at $4,500.
The World Gold Council won’t choose a quantity. Its mid-year outlook sees gold inside 5% of $4,100 for the remaining of 2026, if nothing a lot adjustments.
Here is the catch. Central banks are higher at placing a ground below gold than pushing it up. Record shopping for didn’t cease a 29% fall from January to June. They purchase to a plan, and so they purchase dips, as Glapiński mentioned.
An actual rally wants peculiar traders and funds to come back again.
So watch $3,959, the June low. Gold sits lower than 3% above it. Break that, and the concept central banks maintain up the value falls aside.
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