![\"Gold](\"https:\/\/www.europesays.com\/korea\/wp-content\/uploads\/2026\/08\/news-p.v1.20260805.1e3d3683e18a4e65b49195212623fdbd_P1.png\"\/ "\\"Gold")
Gold bar, Yonhap News<\/p>\nGold bar, Yonhap News<\/p>\n
The Bank of Korea (BOK) has decided to resume purchases of physical gold for the first time in 13 years. With international gold prices having fallen nearly 30% from their early-year peak, individual investors face a complex calculation over whether now is the time to buy or whether to wait longer.<\/p>\n
According to the BOK on the 5th, the central bank announced a plan on the 3rd to purchase domestically produced gold, marking the first time it will buy physical gold since 2013. The purchase targets are gold extracted as a byproduct by LS MnM and Korea Zinc during the copper and zinc smelting process.<\/p>\n
Of the 40 to 45 tons the two companies produce annually, the BOK will buy 4 to 5 tons earmarked for export, paying in won based on international market prices. Unlike its past method of purchasing gold abroad in dollars, the bullion will also be stored domestically. Its existing holdings of 104.4 tons are kept in the vault of the Bank of England. The timing and scale of the purchases have not yet been determined.<\/p>\n
The backdrop is a low holdings ratio. The 104.4 tons account for 3.5% of foreign exchange reserves, ranking 41st in the world according to the World Gold Council (WGC). That is one-eighth of Japan’s holdings (846 tons, 9th) and falls short of Taiwan’s (234.5 tons). To raise the ratio to 7%, the BOK would need to buy more than an additional 100 tons.<\/p>\n
The BOK purchased 90 tons over three years starting in 2011, then faced controversy over buying at the peak when gold prices plunged. Its holdings then remained unchanged for 13 years. After adding overseas-listed gold spot exchange-traded funds (ETFs) for the first time in the second quarter of this year, it has now moved to buy physical gold as well.<\/p>\n
Can It Be Seen as a Bottom Signal?<\/p>\n
Looking at price alone, it is true that the burden of entering the market has eased. International gold prices hit a record high of $5,595 per ounce in January, then fell to $3,942 during intraday trading on June 30, breaking below the $4,000 line. That is a decline of about 29% from the peak.<\/p>\n
After the U.S. Federal Reserve held its benchmark interest rate at 3.50 to 3.75% on July 29, the spot price rose to $4,116 during intraday trading, and on the 30th, August futures closed at $4,160.60. Domestic prices tell the same story. On the KRX gold market, gold traded at 185,990 won per gram on July 30, which converts to around 697,000 won per don of pure gold. Compared with the roughly 1 million won per don it approached on January 29, this is about 30% lower.<\/p>\n
Still, it is difficult to read this as the BOK having marked the bottom. The BOK governor said the timing of the purchases was not set based on a specific price, and that the bank would buy at a moderate pace over the medium to long term. In other words, it is a change in holding strategy rather than a bet on market prices.<\/p>\n
Outlook Is Range-Bound, With the Fed as the Variable<\/p>\n
Forecasts are mixed. In a report on June 26, the World Gold Council (WGC) projected that gold prices in the second half would trade in a range around $4,100 per ounce. It forecast that prices could rise to $4,500 to $5,000 if geopolitical risks grow.<\/p>\n
There is also an opposite scenario. If the U.S. economy shows strong growth and the Federal Reserve raises interest rates, prices could fall another 5 to 20%. A stronger dollar and a decline in investors’ preference for risk assets were also cited as downward factors.<\/p>\n
What supports the floor is central bank demand. Net purchases by central banks in the second quarter reached 289 tons, more than five times the 57 tons in the first quarter. The WGC estimates that gold prices rise about 1% for every 20 to 30 tons that central banks buy above the annual average of 600 tons. The BOK has now joined in as well.<\/p>\n
Individuals, however, are in a different situation. Physical gold such as gold bars carries a 10% value-added tax and fees when purchased, creating a large gap between buying and selling prices. This makes it disadvantageous for those seeking short-term gains. The market’s advice is that, unless one urgently needs cash, it is not too late to decide after watching central bank buying trends and U.S. inflation and interest rate indicators.<\/p>\n","protected":false},"excerpt":{"rendered":"Gold bar, Yonhap News The Bank of Korea (BOK) has decided to resume purchases of physical gold for…\n","protected":false},"author":2,"featured_media":110581,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[456],"tags":[845,56760,846,56762,28614,56688,56761,11704,56687],"class_list":["post-110580","post","type-post","status-publish","format-standard","has-post-thumbnail","category-bank-of-korea","tag-bank-of-korea","tag-bank-of-korea-gold-purchase","tag-bok","tag-central-bank-gold-demand","tag-foreign-exchange-reserves","tag-gold-investment","tag-international-gold-prices","tag-krx-gold-market","tag-world-gold-council"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/110580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=110580"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/110580\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/110581"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=110580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=110580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=110580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}