Bank of Korea launches long-term domestic gold buying program

The Bank of Korea has resumed adding to its gold reserves for the first time since 2013 by purchasing spot gold exchange-traded funds. At the same time, the central bank established a framework for gradual acquisitions of domestically produced gold through cooperation with the Korea Exchange, Korea Securities Depository, LS MnM, and Korea Zinc.

These firms produce an estimated 4 to 5 metric tons of gold annually, part of which the Bank of Korea intends to buy when market conditions are suitable. Reserve Management Group head Jeong Hee-sup stated that acquisitions will occur incrementally over the medium and long term rather than in large one-time purchases.

Jeong noted that gold serves as an inflation hedge and potential alternative to the US dollar amid ongoing geopolitical risks, making it an attractive asset for central banks from a medium- to long-term perspective.