The Bank of Korea bought SPDR Gold Shares in the second quarter, marking its first purchase of gold-linked assets in 13 years as it looks to hedge geopolitical and economic uncertainty. A filing with the U.S. Securities and Exchange Commission shows the central bank held 679,765 shares of the world's largest physical gold-backed ETF at the end of June, worth roughly $250 million. Three months earlier, it owned no shares in the fund. The Bank of Korea said the investment is its first in gold-linked assets since 2013. Because gold ETFs are classified as securities and part of foreign-exchange reserves, the purchase does not add to its official gold reserves. Choi Kyuho, an economist at Hanwha Investment & Securities, said the central bank's current gold allocation is quite low. From the perspective of aligning with global standards, he sees room for further purchases and expects the Bank of Korea to gradually build up its gold holdings.
The Bank of Korea has bought SPDR Gold Shares for the first time in 13 years, a move aimed at hedging geopolitical and economic uncertainty.
According to a filing with the U.S. Securities and Exchange Commission, the central bank held 679,765 shares of the gold ETF at the end of the second quarter, valued at roughly $250 million. Three months earlier, the fund, the world's largest physical gold-backed ETF, had no Korean central bank among its shareholders. The purchase is the first gold-linked asset the Bank of Korea has made since 2013, the central bank said.
The investment does not increase the bank's official gold reserves. Gold ETFs are classified as securities and counted as part of foreign-exchange reserves, so they fall outside the official bullion holdings bucket.
Choi Kyuho, an economist at Hanwha Investment & Securities, said in response that the central bank's gold allocation is "quite low" at present. "From the perspective of aligning with global standards," he said, "the Bank of Korea still has room to further purchase gold. I think they will gradually increase gold holdings."
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