The Bank of Korea (BOK), which had suspended physical gold purchases for 13 years, has decided to expand its gold holdings within its foreign exchange reserves.
Central banks around the world have been increasing their gold reserves to reduce geopolitical risks and reliance on dollar assets, and the BOK is now joining the trend belatedly.
According to a high-ranking BOK official, the bank has tentatively decided to increase its gold holdings within its foreign exchange reserves.
"We have been conservative about purchasing gold, but considering external opinions and the recently changed environment, we have leaned toward slightly increasing our gold holdings," the official said.
As specific expansion plans, the bank is broadly reviewing not only direct physical gold purchases but also methods such as receiving returns in gold instead of cash in exchange for lending out gold currently stored at the Bank of England (BoE).
An official from the BOK's Reserve Management Group stated, "Gold purchases are something we always review when establishing annual foreign exchange reserve management plans," adding, "We are looking into various alternatives together, including physical purchases, gold exchange-traded funds, and futures positions."
In fact, the BOK has already completed preparations such as opening accounts to invest in overseas-listed physical gold ETFs.
A shift in internal sentiment within the BOK has also been detected.
The BOK's Economic Research Institute successively introduced the latest overseas academic information last month and this month, emphasizing the "weakening status of the U.S. dollar as a reserve currency" and the "alternative buffering effect of gold."
A BOK official said, "Whether it is right to buy asset prices when they fall or when they rise depends on the situation," adding, "Gold prices have come down compared to last year in terms of price, so we are continuing to monitor them."
Reported by Kim Jiuk | Video by Hong Jinyoung | Graphics by Lee Sumin | Produced by SBS Digital News
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