South Korea’s Central Bank Hasn’t Bought Gold in 13 Years. That Just Changed.

Published: 08-04-2026, 02:00 pm

South Korea’s central bank has not added a single ounce of gold to its reserves in 13 years. On August 3, that changed.

The Bank of Korea (BOK) announced it has already begun purchasing overseas-listed spot gold ETFs, and has established a framework to buy domestically produced physical gold for the first time since 2013. The bank partnered with copper smelter LS MnM, the Korea Exchange, and the Korea Securities Depository to create a new domestic acquisition channel.

“Interest in safe-haven assets, such as gold, has increased significantly due to the recent escalation of geopolitical risks,” said Jung Hee-sup, director-general of the BOK’s Reserve Management Group.

Why Did the Bank of Korea Stop Buying Gold in the First Place?

The BOK bought 40 tonnes of gold in 2011, 30 tonnes in 2012, and 20 tonnes in 2013 — then stopped entirely. The reason was straightforward: gold prices fell sharply after those purchases, and the bank faced domestic political criticism for buying near the top.

For 13 years, the BOK held its reserves exactly where they were. As of June 2026, the bank holds 104.4 tonnes of gold, worth approximately $4.79 billion — representing just 1.1% of its $427.36 billion in total foreign exchange reserves.

That 1.1% figure is the number that matters.

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What Does South Korea’s Gold Reserve Level Actually Tell You?

Advanced economies typically hold gold at 10% to 20% of their foreign exchange reserves. The United States holds gold at approximately 69% of its reserves. Germany holds gold at approximately 69% as well. Even Japan — historically cautious on gold — holds gold at approximately 5% of its reserves.

South Korea, at 1.1%, is far below any comparable peer.

That gap does not exist because South Korean policymakers disagree with gold as a reserve asset. It exists because of 13 years of political inertia following one bad entry point. Now, the BOK’s Reserve Management Group explicitly cites geopolitical risk and the need to diversify away from dollar-denominated assets. In other words, the bank did not change its mind about gold. It changed its mind about the cost of staying out.

How Does the New Purchase Framework Actually Work?

The BOK will purchase gold from domestic producers — specifically gold that LS MnM and Korea Zinc would otherwise export — through negotiated block trades on the Korea Exchange. The Korea Securities Depository will handle settlement and custody.

This structure matters for two reasons. First, the purchases are settled in Korean won, not U.S. dollars. That means Korea does not need to spend foreign exchange reserves to acquire gold. Second, the gold stays in Korea rather than at the Bank of England, where the BOK has traditionally stored its bullion. Both choices reduce the bank’s exposure to dollar concentration and Western custody systems simultaneously.

The BOK expects to acquire approximately 4 to 5 tonnes per year through this domestic channel. That is a small volume relative to the bank’s total reserves. However, Jung also confirmed that the bank has separately started buying overseas-listed spot gold ETFs — and that the approach is explicitly “gradual and long term,” not a one-time adjustment.

Why Does This Matter for Gold’s Structural Demand Case?

The Bank of Korea is not the largest buyer in the world. But it is a meaningful signal because of what its return represents: the end of the last major holdout cycle in Asia.

Since 2022, global central banks have purchased approximately 1,000 tonnes of gold per year — roughly double the historical average. In Q2 2026 alone, central banks purchased 288.9 tonnes, the best second quarter on record and a 62% increase year over year, according to the World Gold Council’s Gold Demand Trends Q2 2026 report. The buyers driving that trend have been primarily emerging market central banks: China, Poland, Turkey, India, and others seeking to reduce dollar dependence.

South Korea is different. It is a G20 economy, a close U.S. ally, and a country that has spent a decade explicitly avoiding gold. Its return to the market does not reflect desperation or geopolitical hostility to the United States. It reflects a rational reassessment of reserve diversification — and that reasoning is far more transferable to other developed-economy central banks still sitting on the sidelines.

When latecomers arrive, they tend to accelerate a trend rather than merely join it. The BOK’s move is therefore worth watching not for its volume, but for what it signals about the direction of travel among the central banks that have not yet acted.

As of this writing, gold trades at $4,084 per ounce, as tracked on goldsilver.com/price-charts/.

SOURCES
1. Korea Times — BOK to buy domestically produced gold for 1st time in 13 years, August 3, 2026
2. Korea JoongAng Daily — Bank of Korea resumes gold buying after 13-year pause with ETFs and domestic purchases, August 3, 2026
3. UPI — Bank of Korea prepares first physical gold purchase since 2013, August 3, 2026
4. Mining.com / Reuters — South Korea’s central bank to buy gold from domestic producers, August 3, 2026
5. The Deep Dive — Bank of Korea to buy gold again after 13 years, but only from domestic producers, August 4, 2026
6. World Gold Council — Gold Demand Trends Q2 2026, July 30, 2026
7. GoldSilver — Live Gold and Silver Spot Prices

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions.  

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