05.08.2026 10:31
The Bank of Korea is preparing to resume purchases of physical gold after a 13-year hiatus, in line with rising geopolitical risks and its goal of diversifying its reserves. Under the plan, gold purchases are expected to be sourced from domestic production, although no definitive decision has yet been made regarding the amount and timing of the purchases.
The Bank of Korea has begun preparations to purchase physical gold for the first time since 2013. This step signals a significant policy shift in the bank's reserve management.
Under the plan, the gold to be purchased is intended to be sourced from domestic production, thereby adding a portion of the gold that would normally be exported to the country's reserves.
"PLAN IS STILL IN EARLY STAGES"
A central bank spokesperson stated in a statement on August 4 that the plan is still in its initial phase.
The spokesperson noted that no definitive decision has yet been made regarding when the gold purchases will begin or in what quantity they will be carried out.
GEOPOLITICAL RISKS PLAYED A ROLE
Officials responsible for reserves at the central bank stated that one of the most important reasons behind the gold purchase plan is rising geopolitical risks.
In recent years, many central banks have also increased their gold purchases to diversify their reserves for similar reasons.
GOLD MAY BE STORED AT DIFFERENT LOCATIONS
It was reported that the Bank of Korea is considering not only purchasing gold but also diversifying the physical locations where its existing gold reserves are stored.
This step is said to aim at reducing risks that may arise from keeping reserves at a single location.
PURCHASES WILL REMAIN LIMITED
South Korea's annual gold production is estimated to be between 40 and 45 tons. However, most of this production is obtained as a by-product of copper and zinc smelting activities.
While only 4 to 5 tons of the annual production is exported, it is stated that the amount the central bank plans to purchase will also be sourced from this limited supply. Therefore, the planned purchases are considered to be quite small in scale compared to the gold purchases recently made by major central banks.