Bank of Korea resumes physical gold purchases for the first time in 13 years

News Editor

2026-08-04 04:39:59

The Bank of Korea has restarted purchases of physical gold for the first time since 2013, according to a report by Seoul Economic Daily cited by BlockBeats on Aug. 4. The central bank said it will buy gold intended for export by domestic producers through the Korea Exchange (KRX) gold market, with settlement and custody handled by the Korea Securities Depository (KSD). On Aug. 3, the bank said it had set up a cooperation framework with KRX, KSD, and gold producer LS MnM to move the domestic gold procurement plan forward. It said the use of export-oriented gold and block trades is meant to limit the impact on local gold prices and reduce interference with intraday market moves. The move comes as the Bank of Korea seeks to diversify its foreign exchange reserves. As of the end of June, its reserves stood at $427.36 billion, with gold holdings valued at about $4.79 billion, or 1.1% of the total. The bank added that future purchase volumes are not expected to be large, noting that South Korea produces about 40 to 45 tons of gold a year, of which only about 4 to 5 tons are available for export.

The Bank of Korea has restarted a physical gold purchasing program for the first time in 13 years, according to Seoul Economic Daily, as cited by BlockBeats on Aug. 4.

The central bank plans to buy gold earmarked for export by South Korean producers through the Korea Exchange (KRX) gold market and infrastructure provided by the Korea Securities Depository (KSD).

Cooperation framework set up with KRX, KSD, and LS MnM

On Aug. 3, the Bank of Korea said it had established a cooperation framework with the Korea Exchange, the Korea Securities Depository, and gold producer LS MnM to carry out purchases of domestically produced gold.

The transactions will be conducted as block trades on the KRX gold market, while settlement and custody will be handled by KSD.

The central bank said it chose export-oriented gold in order to reduce the impact on domestic gold prices. It also said block trades would help limit interference with intraday market volatility.

First resumption since 2013

This marks the Bank of Korea's first return to physical gold buying since 2013. The bank had previously bought a cumulative 90 tons of gold between 2011 and 2013, but halted physical purchases after a decline in gold prices led to valuation losses.

Gold makes up 1.1% of reserves

As of the end of June this year, the Bank of Korea's foreign exchange reserves stood at $427.36 billion. Gold holdings were valued at about $4.79 billion, accounting for just 1.1% of the total.

With major central banks around the world continuing to add gold, the move is being seen as part of an effort to diversify foreign exchange reserves and reduce concentration in U.S. dollar assets. The Bank of Korea, however, said future purchase volumes are not expected to be large.

Exportable domestic gold remains limited

South Korea's annual gold output is about 40 to 45 tons, but only around 4 to 5 tons are available for export. The Bank of Korea said the decision to resume gold purchases was not based on a view of future gold prices. Instead, it said the timing of transactions would be decided based on corporate procurement requests, domestic and overseas gold prices, and market conditions.

This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan.

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