The Bank of Korea is set to purchase gold for the first time in 13 years, marking a notable shift in the country’s foreign reserve management strategy as central banks worldwide continue to reassess portfolio diversification amid geopolitical and financial uncertainty.
The central bank announced that it has established a framework to buy gold from domestic producers through systems operated by the Korea Exchange and the Korea Securities Depository. Purchases will be made at international market prices and will focus on gold intended for export, a structure designed to minimize any disruption to South Korea’s domestic gold market.
Reserve Diversification Takes Priority
The decision reflects a broader change in how the Bank of Korea approaches reserve management. Officials said the move is intended to diversify
The shift follows months of internal discussions about expanding gold exposure after years of maintaining a conservative stance. Policymakers have pointed to evolving global conditions, including heightened geopolitical risks and growing interest among central banks in holding larger allocations of gold as a reserve asset.
Global Central Bank Trend
South Korea’s move comes as many central banks continue to view gold as an important component of reserve portfolios despite fluctuations in overall purchasing activity. Industry surveys indicate that reserve managers broadly expect central bank gold holdings to continue increasing over the coming years as institutions seek greater diversification away from traditional reserve assets.
While global gold buying by central banks has experienced periods of slower activity this year, long-term demand for bullion remains supported by reserve managers seeking protection against geopolitical uncertainty, currency volatility, and financial market risks.
For the Bank of Korea, the renewed gold purchases signal a strategic adjustment rather than a short-term policy change. The decision aligns South Korea more closely with the broader international trend of using gold as a stabilizing asset within official reserves while maintaining a measured approach designed to avoid disruptions in the domestic bullion market.
