{"content_id":"cysfzliqlr","slug":"bank-of-korea-physical-gold-purchase-2026","locale":"en","schema_type":"Article","category":"trends","category_name":"Trends","title":"Bank of Korea Resumes Physical Gold Purchases in 2026: Won Settlement, OTC Trading Structure, and Implications","summary":"The Bank of Korea is pursuing a new procurement channel to purchase in won gold produced by domestic refiners and intended for export in 2026. The goals are to diversify foreign exchange reserves and expand domestic storage, but the amount available for purchase does not represent the actual amount to be bought, and gold prices, exchange rates, and storage risks must also be considered.","sponsorship_disclosure":null,"author":{"name":"Injoys Editorial Team","url":"https://injoys.com/ko/about"},"key_points":["The Bank of Korea is considering increasing over the medium to long term its gold holdings of 104.4 tonnes, which it has maintained since purchasing an additional 90 tonnes in 2011∼2013.","The initial target under consideration is approximately 4∼5 tonnes per year of gold produced by domestic refiners that is not consumed domestically and is intended for export.","Won settlement and negotiated OTC block trades are structured to reduce the direct impact on the foreign exchange market and exchange quotations.","The stated annual export volume of 4∼5 tonnes merely indicates the potential supply range and is not a commitment by the Bank of Korea to purchase the entire amount every year.","Because a central bank's gold purchases are long-term foreign exchange reserve management decisions, they are difficult to interpret as a short-term buying signal for individual investors."],"content_markdown":"The Bank of Korea is moving to resume purchases of physical gold for the first time in about 13 years since 2013. The core of the plan is to create a new procurement channel under which it buys in won gold that domestic refiners had intended to export, rather than purchasing gold with dollars on international markets, and stores it using domestic infrastructure.\n\nAlong with the dollar, gold is a major international reserve asset, but it pays no interest and is subject to significant price fluctuations. The decision should therefore be understood not simply as a forecast for gold prices, but as a long-term management strategy to diversify the currencies, assets, and storage locations of foreign exchange reserves.\n\n## What Has Changed\n\nThe Bank of Korea is known to hold 104.4 tons of gold. Of this, 90 tons was purchased between 2011 and 2013, and it has not increased its holdings since 2013.\n\nAccording to the plan provided, after adding a small amount of overseas-listed spot gold ETFs in the second quarter of 2026, the Bank of Korea is establishing a channel for procuring physical gold domestically. ETF holdings provide exposure to gold prices in the form of financial products, whereas physical purchases involve ownership and storage of the gold itself.\n\n| Category | Main Purchases Through 2013 | Approach Planned for 2026 |\n|---|---|---|\n| Procurement market | Mainly international gold markets | Volumes that domestic refiners planned to export |\n| Settlement currency | Primarily dollars | Settlement in won planned |\n| Transaction method | Purchases on international markets | Negotiated off-exchange block trades |\n| Storage | High proportion stored overseas | Addition of a domestic storage channel |\n| Policy objective | Increase gold holdings | Diversify assets, settlement currencies, and storage locations |\n\nThe new approach will not completely replace existing purchases on international markets. Domestic procurement is closer to an additional channel that the central bank can choose depending on market conditions.\n\n## How Will Physical Gold Be Purchased Domestically?\n\nThe planned transaction structure involves the Bank of Korea, domestic refiners, Korea Exchange, and Korea Securities Depository, among others. The specific roles of each institution and the settlement and storage standards must be confirmed through actual contracts and subsequent disclosures, but the basic process can be summarized as follows.\n\n1. Domestic refiners produce gold during the smelting of nonferrous metals.\n2. Volumes that will not be supplied to domestic demand and are instead intended for export are presented as candidates for purchase.\n3. The Bank of Korea reviews its foreign exchange reserve management plan, international gold prices, domestic prices, exchange rates, and market conditions.\n4. If the parties agree on the quantity and price, the transaction is conducted as a negotiated off-exchange block trade rather than through an order placed on the exchange.\n5. Payment is settled in won, and gold that has passed eligibility verification is deposited in designated domestic storage infrastructure.\n\nDomestic refiners are reported to produce approximately 40–45 tons of gold annually as a byproduct of smelting copper, zinc, and other metals. Of this amount, approximately 4–5 tons that is not consumed domestically and is scheduled for export will be considered first.\n\nHowever, 4–5 tons per year is not a fixed purchase volume that the Bank of Korea is obligated to buy. Even if a company proposes a transaction, the Bank of Korea may purchase only part of the volume or decline to trade depending on prices and management conditions.\n\n## Why the Bank of Korea Wants to Increase Its Gold Holdings\n\n### Diversification of Foreign Exchange Reserve Assets\n\nForeign exchange reserves are managed across various assets, including government bonds, deposits, equities, and gold. Because gold is not a claim on an issuer in any particular country, it is not directly tied to sovereign credit risk. This is why central banks consider gold as a diversification tool when geopolitical conflict, financial sanctions, or changes in confidence in major currencies intensify.\n\nHowever, gold does not earn interest. Increasing its share may help diversify credit risk, but it also entails the opportunity cost of forgoing interest income and exposure to price volatility.\n\n### A Procurement Channel That Does Not Increase Dollar Demand\n\nPurchasing gold on international markets generally requires dollar liquidity. Buying domestically refined gold in won means that the Bank of Korea does not need to obtain additional dollars from the foreign exchange market at the time of the transaction, which can reduce pressure on the market.\n\nThis does not mean that the economic value of gold becomes fixed in won. The won value of gold holdings remains affected by international gold prices and the won-dollar exchange rate. Won settlement changes the payment method at the purchase stage; it does not eliminate the currency exposure of gold prices.\n\n### Diversification of Storage Locations\n\nA high proportion of the physical gold held by the Bank of Korea is known to be stored overseas. Adding domestic storage could partly diversify risks such as asset freezes under foreign jurisdictions, restrictions on cross-border transfers, and disruptions at specific custodians.\n\nConversely, domestic storage is neither free nor risk-free. Costs are incurred for security, insurance, due diligence, quality verification, inventory reconciliation, and maintaining eligibility for delivery into international markets. This is why dividing storage appropriately between domestic and overseas locations is more important than keeping everything in one place.\n\n## Measures to Reduce Market Impact and Their Limitations\n\nIf the Bank of Korea places large buy orders on the exchange, spot gold quotations could rise rapidly and encourage investors to chase prices. The following measures have been proposed to reduce this effect.\n\n- Priority will be given to volumes intended for export rather than those to be supplied to domestic investors.\n- Negotiated off-exchange block trades will be used instead of accumulating public buy orders in the exchange order book.\n- Quantities and prices will be negotiated with producers in advance.\n- The Bank of Korea will not automatically purchase the volumes offered, but will review its gold management plan and market prices at the time.\n\nThis structure can reduce direct buying pressure on exchange quotations, but it cannot completely prevent domestic gold prices from rising. The central bank’s purchase plan itself may change market expectations, and producers’ choice to sell domestically instead of exporting may alter supply conditions and bargaining power over prices.\n\nDomestic gold prices may also differ from international prices depending on international gold prices, the won-dollar exchange rate, whether value-added tax applies, distribution costs, and domestic supply and demand. The benchmark for off-exchange transaction prices and the level of cost disclosure are key items that must be verified in the future.\n\n## How to Interpret the Gold Share Figures\n\nGold holdings of 104.4 tons are relatively clear because they represent a physical quantity, but gold’s share of foreign exchange reserves varies depending on the valuation method and reference date.\n\nThe materials provided put gold’s share of foreign exchange reserves at approximately 3.5%, but the valuation method and reference date need to be confirmed in Bank of Korea disclosures. If official foreign exchange reserve statistics and private-sector data show different shares for gold, the following conditions should be checked first.\n\n- Whether gold was valued at acquisition cost or market price\n- The reference date for international gold prices and exchange rates\n- Whether the denominator for total foreign exchange reserves is from the same point in time\n- Whether gold ETFs were included in physical gold holdings or classified separately as securities assets\n- Whether country rankings are based on the volume of gold holdings or gold’s share of foreign exchange reserves\n\nAccordingly, descriptions such as ranking around 39th–40th in the world must also specify the indicator and reference date. Rankings by gold holdings and rankings by gold’s share of foreign exchange reserves may produce different results, and the share based on market value also changes as gold prices move.\n\n## Domestically Refined Gold Is Different From Domestically Mined Gold\n\nOne aspect of the plan that can easily be overlooked is the meaning of “gold produced domestically.” Gold produced by domestic refiners does not mean that all of the raw material was mined from domestic mines.\n\nNonferrous metal refiners can recover precious metals such as gold and silver as byproducts while processing ore, concentrates, or recycled materials procured domestically and overseas. The key point of this transaction is therefore not the geological origin of the gold, but that the Bank of Korea will domestically acquire eligible gold that was refined in Korea and had been intended for export.\n\nFor inclusion in central bank reserve assets, it is necessary to verify not only weight and purity but also refinery certification, serial numbers, ownership history, links to sanctioned entities, and whether raw materials were responsibly sourced. The international quality specifications and due diligence standards to be applied must be confirmed in subsequent contracts.\n\n## Benefits and Risks for Foreign Exchange Reserve Management\n\n| Item | Expected Benefit | Risks to Consider |\n|---|---|---|\n| Asset diversification | Reduced dependence on dollar-denominated bonds and specific issuers | Declines in gold prices and the opportunity cost of a non-interest-bearing asset |\n| Won settlement | Suppression of additional dollar demand at the time of purchase | Gold’s value remains exposed to international gold prices and exchange rates |\n| Domestic procurement | Reduced price impact from international market orders and reduced dependence on procurement channels | Domestic supply is limited and production schedules may be irregular |\n| Domestic storage | Partial diversification of overseas freeze and transfer-restriction risks | Costs of maintaining security, insurance, audits, and re-export systems |\n| Off-exchange transactions | Reduced direct impact on exchange quotations | Need to manage transparency in the price-setting process |\n\nGold can serve as a diversifying asset during crises, but its price does not rise in every crisis. When liquidity becomes severely constrained, gold may also face selling pressure, while rising real interest rates or a stronger dollar may weigh on prices.\n\n## Can This Be Viewed as a Buy Signal for Individual Investors?\n\nIt is difficult to conclude that the Bank of Korea’s resumption of purchases signals a bottom in gold prices. Central banks manage the stability, liquidity, and diversification benefits of reserve assets with a horizon of several years or more, while individual investors differ in their investment periods, taxes, transaction costs, and ability to tolerate losses.\n\nThe following differences should be distinguished in particular.\n\n- The central bank manages reserve assets for monetary policy and foreign exchange market stability.\n- Individuals must consider won-denominated returns and when they will need funds for living expenses.\n- The price of the central bank’s large off-exchange purchases may differ from the price individuals pay in the retail market.\n- Physical gold, the KRX gold market, gold ETFs, gold accounts, and derivatives have different structures in terms of taxes, storage, tracking error, and credit risk.\n\nRather than chasing prices solely on news that purchases are resuming, investors should first determine what role gold will play in their overall assets and whether they can continue holding it even if prices fall.\n\n## Items to Monitor\n\nTo assess the actual scale and effects of the plan, the following disclosures should be monitored continuously.\n\n1. Whether and when the first physical gold transaction is executed\n2. The actual purchase volume and changes in cumulative gold holdings\n3. The benchmark used to determine off-exchange transaction prices\n4. Gold purity, specifications, refinery certification, and raw-material traceability standards\n5. The specific settlement and storage roles of Korea Exchange and Korea Securities Depository\n6. Management principles for domestically and overseas stored gold\n7. How gold ETFs and physical gold are classified in foreign exchange reserve statistics\n\nIn conclusion, the significance of this plan does not lie in the Bank of Korea making a particular forecast for gold prices. The key point is that it represents an institutional change intended to increase flexibility in foreign exchange reserve management by securing a domestic procurement channel that does not require additional use of dollars and by adding a domestic storage option.","content_html":"\u003cp\u003eThe Bank of Korea is moving to resume purchases of physical gold for the first time in about 13 years since 2013. The core of the plan is to create a new procurement channel under which it buys in won gold that domestic refiners had intended to export, rather than purchasing gold with dollars on international markets, and stores it using domestic infrastructure.\u003c/p\u003e\n\u003cp\u003eAlong with the dollar, gold is a major international reserve asset, but it pays no interest and is subject to significant price fluctuations. The decision should therefore be understood not simply as a forecast for gold prices, but as a long-term management strategy to diversify the currencies, assets, and storage locations of foreign exchange reserves.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#what-has-changed\" class=\"anchor\" id=\"what-has-changed\"\u003e\u003c/a\u003eWhat Has Changed\u003c/h2\u003e\n\u003cp\u003eThe Bank of Korea is known to hold 104.4 tons of gold. Of this, 90 tons was purchased between 2011 and 2013, and it has not increased its holdings since 2013.\u003c/p\u003e\n\u003cp\u003eAccording to the plan provided, after adding a small amount of overseas-listed spot gold ETFs in the second quarter of 2026, the Bank of Korea is establishing a channel for procuring physical gold domestically. ETF holdings provide exposure to gold prices in the form of financial products, whereas physical purchases involve ownership and storage of the gold itself.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eCategory\u003c/th\u003e\n\u003cth\u003eMain Purchases Through 2013\u003c/th\u003e\n\u003cth\u003eApproach Planned for 2026\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eProcurement market\u003c/td\u003e\n\u003ctd data-label=\"Main Purchases Through 2013\"\u003eMainly international gold markets\u003c/td\u003e\n\u003ctd data-label=\"Approach Planned for 2026\"\u003eVolumes that domestic refiners planned to export\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eSettlement currency\u003c/td\u003e\n\u003ctd data-label=\"Main Purchases Through 2013\"\u003ePrimarily dollars\u003c/td\u003e\n\u003ctd data-label=\"Approach Planned for 2026\"\u003eSettlement in won planned\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eTransaction method\u003c/td\u003e\n\u003ctd data-label=\"Main Purchases Through 2013\"\u003ePurchases on international markets\u003c/td\u003e\n\u003ctd data-label=\"Approach Planned for 2026\"\u003eNegotiated off-exchange block trades\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eStorage\u003c/td\u003e\n\u003ctd data-label=\"Main Purchases Through 2013\"\u003eHigh proportion stored overseas\u003c/td\u003e\n\u003ctd data-label=\"Approach Planned for 2026\"\u003eAddition of a domestic storage channel\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003ePolicy objective\u003c/td\u003e\n\u003ctd data-label=\"Main Purchases Through 2013\"\u003eIncrease gold holdings\u003c/td\u003e\n\u003ctd data-label=\"Approach Planned for 2026\"\u003eDiversify assets, settlement currencies, and storage locations\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eThe new approach will not completely replace existing purchases on international markets. Domestic procurement is closer to an additional channel that the central bank can choose depending on market conditions.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#how-will-physical-gold-be-purchased-domestically\" class=\"anchor\" id=\"how-will-physical-gold-be-purchased-domestically\"\u003e\u003c/a\u003eHow Will Physical Gold Be Purchased Domestically?\u003c/h2\u003e\n\u003cp\u003eThe planned transaction structure involves the Bank of Korea, domestic refiners, Korea Exchange, and Korea Securities Depository, among others. The specific roles of each institution and the settlement and storage standards must be confirmed through actual contracts and subsequent disclosures, but the basic process can be summarized as follows.\u003c/p\u003e\n\u003col\u003e\n\u003cli\u003eDomestic refiners produce gold during the smelting of nonferrous metals.\u003c/li\u003e\n\u003cli\u003eVolumes that will not be supplied to domestic demand and are instead intended for export are presented as candidates for purchase.\u003c/li\u003e\n\u003cli\u003eThe Bank of Korea reviews its foreign exchange reserve management plan, international gold prices, domestic prices, exchange rates, and market conditions.\u003c/li\u003e\n\u003cli\u003eIf the parties agree on the quantity and price, the transaction is conducted as a negotiated off-exchange block trade rather than through an order placed on the exchange.\u003c/li\u003e\n\u003cli\u003ePayment is settled in won, and gold that has passed eligibility verification is deposited in designated domestic storage infrastructure.\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eDomestic refiners are reported to produce approximately 40–45 tons of gold annually as a byproduct of smelting copper, zinc, and other metals. Of this amount, approximately 4–5 tons that is not consumed domestically and is scheduled for export will be considered first.\u003c/p\u003e\n\u003cp\u003eHowever, 4–5 tons per year is not a fixed purchase volume that the Bank of Korea is obligated to buy. Even if a company proposes a transaction, the Bank of Korea may purchase only part of the volume or decline to trade depending on prices and management conditions.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#why-the-bank-of-korea-wants-to-increase-its-gold-holdings\" class=\"anchor\" id=\"why-the-bank-of-korea-wants-to-increase-its-gold-holdings\"\u003e\u003c/a\u003eWhy the Bank of Korea Wants to Increase Its Gold Holdings\u003c/h2\u003e\n\u003ch3\u003e\n\u003ca href=\"#diversification-of-foreign-exchange-reserve-assets\" class=\"anchor\" id=\"diversification-of-foreign-exchange-reserve-assets\"\u003e\u003c/a\u003eDiversification of Foreign Exchange Reserve Assets\u003c/h3\u003e\n\u003cp\u003eForeign exchange reserves are managed across various assets, including government bonds, deposits, equities, and gold. Because gold is not a claim on an issuer in any particular country, it is not directly tied to sovereign credit risk. This is why central banks consider gold as a diversification tool when geopolitical conflict, financial sanctions, or changes in confidence in major currencies intensify.\u003c/p\u003e\n\u003cp\u003eHowever, gold does not earn interest. Increasing its share may help diversify credit risk, but it also entails the opportunity cost of forgoing interest income and exposure to price volatility.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#a-procurement-channel-that-does-not-increase-dollar-demand\" class=\"anchor\" id=\"a-procurement-channel-that-does-not-increase-dollar-demand\"\u003e\u003c/a\u003eA Procurement Channel That Does Not Increase Dollar Demand\u003c/h3\u003e\n\u003cp\u003ePurchasing gold on international markets generally requires dollar liquidity. Buying domestically refined gold in won means that the Bank of Korea does not need to obtain additional dollars from the foreign exchange market at the time of the transaction, which can reduce pressure on the market.\u003c/p\u003e\n\u003cp\u003eThis does not mean that the economic value of gold becomes fixed in won. The won value of gold holdings remains affected by international gold prices and the won-dollar exchange rate. Won settlement changes the payment method at the purchase stage; it does not eliminate the currency exposure of gold prices.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#diversification-of-storage-locations\" class=\"anchor\" id=\"diversification-of-storage-locations\"\u003e\u003c/a\u003eDiversification of Storage Locations\u003c/h3\u003e\n\u003cp\u003eA high proportion of the physical gold held by the Bank of Korea is known to be stored overseas. Adding domestic storage could partly diversify risks such as asset freezes under foreign jurisdictions, restrictions on cross-border transfers, and disruptions at specific custodians.\u003c/p\u003e\n\u003cp\u003eConversely, domestic storage is neither free nor risk-free. Costs are incurred for security, insurance, due diligence, quality verification, inventory reconciliation, and maintaining eligibility for delivery into international markets. This is why dividing storage appropriately between domestic and overseas locations is more important than keeping everything in one place.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#measures-to-reduce-market-impact-and-their-limitations\" class=\"anchor\" id=\"measures-to-reduce-market-impact-and-their-limitations\"\u003e\u003c/a\u003eMeasures to Reduce Market Impact and Their Limitations\u003c/h2\u003e\n\u003cp\u003eIf the Bank of Korea places large buy orders on the exchange, spot gold quotations could rise rapidly and encourage investors to chase prices. The following measures have been proposed to reduce this effect.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003ePriority will be given to volumes intended for export rather than those to be supplied to domestic investors.\u003c/li\u003e\n\u003cli\u003eNegotiated off-exchange block trades will be used instead of accumulating public buy orders in the exchange order book.\u003c/li\u003e\n\u003cli\u003eQuantities and prices will be negotiated with producers in advance.\u003c/li\u003e\n\u003cli\u003eThe Bank of Korea will not automatically purchase the volumes offered, but will review its gold management plan and market prices at the time.\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eThis structure can reduce direct buying pressure on exchange quotations, but it cannot completely prevent domestic gold prices from rising. The central bank’s purchase plan itself may change market expectations, and producers’ choice to sell domestically instead of exporting may alter supply conditions and bargaining power over prices.\u003c/p\u003e\n\u003cp\u003eDomestic gold prices may also differ from international prices depending on international gold prices, the won-dollar exchange rate, whether value-added tax applies, distribution costs, and domestic supply and demand. The benchmark for off-exchange transaction prices and the level of cost disclosure are key items that must be verified in the future.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#how-to-interpret-the-gold-share-figures\" class=\"anchor\" id=\"how-to-interpret-the-gold-share-figures\"\u003e\u003c/a\u003eHow to Interpret the Gold Share Figures\u003c/h2\u003e\n\u003cp\u003eGold holdings of 104.4 tons are relatively clear because they represent a physical quantity, but gold’s share of foreign exchange reserves varies depending on the valuation method and reference date.\u003c/p\u003e\n\u003cp\u003eThe materials provided put gold’s share of foreign exchange reserves at approximately 3.5%, but the valuation method and reference date need to be confirmed in Bank of Korea disclosures. If official foreign exchange reserve statistics and private-sector data show different shares for gold, the following conditions should be checked first.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eWhether gold was valued at acquisition cost or market price\u003c/li\u003e\n\u003cli\u003eThe reference date for international gold prices and exchange rates\u003c/li\u003e\n\u003cli\u003eWhether the denominator for total foreign exchange reserves is from the same point in time\u003c/li\u003e\n\u003cli\u003eWhether gold ETFs were included in physical gold holdings or classified separately as securities assets\u003c/li\u003e\n\u003cli\u003eWhether country rankings are based on the volume of gold holdings or gold’s share of foreign exchange reserves\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eAccordingly, descriptions such as ranking around 39th–40th in the world must also specify the indicator and reference date. Rankings by gold holdings and rankings by gold’s share of foreign exchange reserves may produce different results, and the share based on market value also changes as gold prices move.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#domestically-refined-gold-is-different-from-domestically-mined-gold\" class=\"anchor\" id=\"domestically-refined-gold-is-different-from-domestically-mined-gold\"\u003e\u003c/a\u003eDomestically Refined Gold Is Different From Domestically Mined Gold\u003c/h2\u003e\n\u003cp\u003eOne aspect of the plan that can easily be overlooked is the meaning of “gold produced domestically.” Gold produced by domestic refiners does not mean that all of the raw material was mined from domestic mines.\u003c/p\u003e\n\u003cp\u003eNonferrous metal refiners can recover precious metals such as gold and silver as byproducts while processing ore, concentrates, or recycled materials procured domestically and overseas. The key point of this transaction is therefore not the geological origin of the gold, but that the Bank of Korea will domestically acquire eligible gold that was refined in Korea and had been intended for export.\u003c/p\u003e\n\u003cp\u003eFor inclusion in central bank reserve assets, it is necessary to verify not only weight and purity but also refinery certification, serial numbers, ownership history, links to sanctioned entities, and whether raw materials were responsibly sourced. The international quality specifications and due diligence standards to be applied must be confirmed in subsequent contracts.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#benefits-and-risks-for-foreign-exchange-reserve-management\" class=\"anchor\" id=\"benefits-and-risks-for-foreign-exchange-reserve-management\"\u003e\u003c/a\u003eBenefits and Risks for Foreign Exchange Reserve Management\u003c/h2\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eItem\u003c/th\u003e\n\u003cth\u003eExpected Benefit\u003c/th\u003e\n\u003cth\u003eRisks to Consider\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Item\"\u003eAsset diversification\u003c/td\u003e\n\u003ctd data-label=\"Expected Benefit\"\u003eReduced dependence on dollar-denominated bonds and specific issuers\u003c/td\u003e\n\u003ctd data-label=\"Risks to Consider\"\u003eDeclines in gold prices and the opportunity cost of a non-interest-bearing asset\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Item\"\u003eWon settlement\u003c/td\u003e\n\u003ctd data-label=\"Expected Benefit\"\u003eSuppression of additional dollar demand at the time of purchase\u003c/td\u003e\n\u003ctd data-label=\"Risks to Consider\"\u003eGold’s value remains exposed to international gold prices and exchange rates\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Item\"\u003eDomestic procurement\u003c/td\u003e\n\u003ctd data-label=\"Expected Benefit\"\u003eReduced price impact from international market orders and reduced dependence on procurement channels\u003c/td\u003e\n\u003ctd data-label=\"Risks to Consider\"\u003eDomestic supply is limited and production schedules may be irregular\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Item\"\u003eDomestic storage\u003c/td\u003e\n\u003ctd data-label=\"Expected Benefit\"\u003ePartial diversification of overseas freeze and transfer-restriction risks\u003c/td\u003e\n\u003ctd data-label=\"Risks to Consider\"\u003eCosts of maintaining security, insurance, audits, and re-export systems\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Item\"\u003eOff-exchange transactions\u003c/td\u003e\n\u003ctd data-label=\"Expected Benefit\"\u003eReduced direct impact on exchange quotations\u003c/td\u003e\n\u003ctd data-label=\"Risks to Consider\"\u003eNeed to manage transparency in the price-setting process\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eGold can serve as a diversifying asset during crises, but its price does not rise in every crisis. When liquidity becomes severely constrained, gold may also face selling pressure, while rising real interest rates or a stronger dollar may weigh on prices.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#can-this-be-viewed-as-a-buy-signal-for-individual-investors\" class=\"anchor\" id=\"can-this-be-viewed-as-a-buy-signal-for-individual-investors\"\u003e\u003c/a\u003eCan This Be Viewed as a Buy Signal for Individual Investors?\u003c/h2\u003e\n\u003cp\u003eIt is difficult to conclude that the Bank of Korea’s resumption of purchases signals a bottom in gold prices. Central banks manage the stability, liquidity, and diversification benefits of reserve assets with a horizon of several years or more, while individual investors differ in their investment periods, taxes, transaction costs, and ability to tolerate losses.\u003c/p\u003e\n\u003cp\u003eThe following differences should be distinguished in particular.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eThe central bank manages reserve assets for monetary policy and foreign exchange market stability.\u003c/li\u003e\n\u003cli\u003eIndividuals must consider won-denominated returns and when they will need funds for living expenses.\u003c/li\u003e\n\u003cli\u003eThe price of the central bank’s large off-exchange purchases may differ from the price individuals pay in the retail market.\u003c/li\u003e\n\u003cli\u003ePhysical gold, the KRX gold market, gold ETFs, gold accounts, and derivatives have different structures in terms of taxes, storage, tracking error, and credit risk.\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eRather than chasing prices solely on news that purchases are resuming, investors should first determine what role gold will play in their overall assets and whether they can continue holding it even if prices fall.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#items-to-monitor\" class=\"anchor\" id=\"items-to-monitor\"\u003e\u003c/a\u003eItems to Monitor\u003c/h2\u003e\n\u003cp\u003eTo assess the actual scale and effects of the plan, the following disclosures should be monitored continuously.\u003c/p\u003e\n\u003col\u003e\n\u003cli\u003eWhether and when the first physical gold transaction is executed\u003c/li\u003e\n\u003cli\u003eThe actual purchase volume and changes in cumulative gold holdings\u003c/li\u003e\n\u003cli\u003eThe benchmark used to determine off-exchange transaction prices\u003c/li\u003e\n\u003cli\u003eGold purity, specifications, refinery certification, and raw-material traceability standards\u003c/li\u003e\n\u003cli\u003eThe specific settlement and storage roles of Korea Exchange and Korea Securities Depository\u003c/li\u003e\n\u003cli\u003eManagement principles for domestically and overseas stored gold\u003c/li\u003e\n\u003cli\u003eHow gold ETFs and physical gold are classified in foreign exchange reserve statistics\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eIn conclusion, the significance of this plan does not lie in the Bank of Korea making a particular forecast for gold prices. The key point is that it represents an institutional change intended to increase flexibility in foreign exchange reserve management by securing a domestic procurement channel that does not require additional use of dollars and by adding a domestic storage option.\u003c/p\u003e\n","tags":["Bank of Korea","Asset allocation","Foreign exchange market","Geopolitics","Gold"],"faqs":[{"question":"How much gold does the Bank of Korea hold?","answer":"Its known physical gold holdings amount to 104.4 tons. Of this, 90 tons were purchased additionally between 2011 and 2013, and any actual changes in holdings will need to be confirmed through future disclosures of the Bank of Korea's foreign exchange reserves."},{"question":"Does the Bank of Korea buy all 4∼5 tons of gold scheduled for export each year?","answer":"No. Approximately 4∼5 tons is the annual supply volume that may be considered first, not a confirmed purchase volume. The Bank of Korea may decide whether to proceed with a transaction and how much to purchase after reviewing prices, its foreign exchange reserve management plan, and market conditions."},{"question":"Does buying gold with Korean won eliminate exchange-rate risk?","answer":"No. Settlement in Korean won only reduces the need to obtain additional U.S. dollars at the time of purchase. The value of the purchased gold in Korean won will continue to fluctuate based on international gold prices and the won-dollar exchange rate."},{"question":"What is an over-the-counter negotiated block trade?","answer":"It is a method in which a buyer and seller negotiate the price and quantity and then execute a large-volume transaction outside the exchange's regular order book. Because large orders are not placed directly on the public order book, it can reduce the impact on exchange-traded prices, but it cannot completely prevent effects on market expectations."},{"question":"Is domestically refined gold mined in Korea?","answer":"Not necessarily. Gold recovered as a by-product when domestic refiners process ore, concentrates, or recycled materials from Korea or abroad may also be included in domestically refined gold. The significance of this plan lies in acquiring domestically gold that has been refined in Korea and is scheduled for export, rather than in the country of origin where it was mined."},{"question":"How does purchasing a gold ETF differ from purchasing physical gold?","answer":"A gold ETF involves holding securities that track the price of gold, while purchasing physical gold entails ownership and storage of gold bars. ETFs carry risks related to product structure and counterparties, while physical gold incurs transportation, storage, insurance, and quality verification costs."},{"question":"Will domestic gold prices rise if the Bank of Korea buys gold?","answer":"Trading the volume scheduled for export over the counter can reduce the direct impact on exchange-traded quotes. However, expectations of increased central bank demand and changes in supply conditions could still indirectly affect domestic prices."},{"question":"Is the Bank of Korea's gold purchase a signal that individuals should also buy gold?","answer":"That conclusion cannot be made definitively. Central banks hold gold to diversify their foreign exchange reserves over the long term, but individuals must consider their investment horizon, taxes, transaction costs, and ability to absorb losses. The timing of a central bank's purchases does not guarantee that gold prices are at their lowest point."},{"question":"Why does the figure stating that gold accounts for 3.5% of foreign exchange reserves vary across sources?","answer":"The proportion varies depending on whether gold is valued at its acquisition price or market price and which date's gold price, exchange rate, and foreign exchange reserves are used. When comparing the share of gold holdings, the valuation method and reference date should be checked together."}],"sources":[{"url":"https://www.bok.or.kr/portal/main/main.do","title":"Bank of Korea","type":"source"},{"url":"https://ecos.bok.or.kr/","title":"Bank of Korea Economic Statistics System ECOS","type":"data_point"},{"url":"https://www.gold.org/goldhub/data/gold-reserves-by-country","title":"World Gold Council - Gold Reserves by Country","type":"data_point"},{"url":"https://data.imf.org/","title":"IMF Data","type":"data_point"}],"images":[{"id":764,"url":"https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6OTc5NiwicHVyIjoiYmxvYl9pZCJ9fQ==--a187c4dd8ca72f3321cec939b59ff2c428252429/ai-eef5139b.webp","is_representative":true,"generation_method":"ai_photo","license":"ai_generated","mime_type":"image/webp","translations":{"ko":{"alt":"금고 앞 탁자 위 검은 보관함에 담긴 금괴와 시장 화면을 보는 두 직원","caption":"두 직원이 금고 안에서 금괴를 두고 시장 데이터를 확인하고 있다.","description":null},"en":{"alt":"Gold bar in a black case as two staff view market data beside a vault","caption":"Two staff members review market data while a secured gold bar rests nearby.","description":null},"ja":{"alt":"金庫室で黒いケースに収められた金塊と市場データを見る職員2人","caption":"職員2人が金塊のそばで市場データを確認している。","description":null},"es":{"alt":"Lingote de oro en un maletín negro y dos empleados ante datos de mercado junto a una bóveda","caption":"Dos empleados revisan datos de mercado mientras un lingote permanece protegido en su maletín.","description":null},"id":{"alt":"Emas batangan dalam koper hitam dan dua petugas memantau data pasar di dekat brankas","caption":"Dua petugas meninjau data pasar dengan emas batangan tersimpan aman di dekat mereka.","description":null},"pt":{"alt":"Barra de ouro em maleta preta e dois funcionários analisando dados de mercado junto a um cofre","caption":"Dois funcionários analisam dados de mercado enquanto uma barra de ouro permanece protegida na maleta.","description":null},"zh-hant":{"alt":"金庫旁的黑色箱內放著金條，兩名職員查看市場數據","caption":"兩名職員在金條旁查看螢幕上的市場數據。","description":null},"de":{"alt":"Goldbarren in schwarzem Koffer und zwei Mitarbeiter vor Marktdaten neben einem Tresorraum","caption":"Zwei Mitarbeiter prüfen Marktdaten, während ein gesicherter Goldbarren vor ihnen liegt.","description":null}}},{"id":765,"url":"https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6OTgwMiwicHVyIjoiYmxvYl9pZCJ9fQ==--fc772e68f4d2e69dcdc9244905e1caec4788d587/ai-d55c5a10.webp","is_representative":false,"generation_method":"ai_image","license":"ai_generated","mime_type":"image/webp","translations":{"ko":{"alt":"한국 지도와 금 생산·거래 흐름, 중앙은행 금고 및 위험 지표를 나타낸 인포그래픽","caption":"금 공급부터 중앙은행 보관까지의 흐름과 환율·가격 위험을 도식화했다.","description":null},"en":{"alt":"Infographic with a Korea map, gold supply flow, central bank vault, and risk charts","caption":"The graphic maps gold supply and central bank custody alongside exchange-rate and price risks.","description":null},"ja":{"alt":"朝鮮半島の地図、金の供給経路、中央銀行の金庫、リスク指標を示す図解","caption":"金の供給から中央銀行での保管までの流れと為替・価格リスクを図示している。","description":null},"es":{"alt":"Infografía con mapa de Corea, flujo del oro, bóveda de banco central y gráficos de riesgo","caption":"El gráfico muestra el suministro y la custodia del oro junto con los riesgos cambiarios y de precio.","description":null},"id":{"alt":"Infografik peta Korea, alur pasokan emas, brankas bank sentral, dan grafik risiko","caption":"Grafik ini menunjukkan alur pasokan hingga penyimpanan emas serta risiko kurs dan harga.","description":null},"pt":{"alt":"Infográfico com mapa da Coreia, fluxo do ouro, cofre do banco central e gráficos de risco","caption":"O gráfico mostra o fornecimento e a custódia do ouro, além dos riscos cambiais e de preço.","description":null},"zh-hant":{"alt":"韓國地圖、黃金供應流程、中央銀行金庫與風險圖表的資訊圖","caption":"圖表呈現黃金從供應到中央銀行保管的流程，以及匯率與價格風險。","description":null},"de":{"alt":"Infografik mit Korea-Karte, Goldlieferkette, Zentralbanktresor und Risikodiagrammen","caption":"Die Grafik zeigt Goldversorgung und Zentralbankverwahrung sowie Wechselkurs- und Preisrisiken.","description":null}}}],"published_at":"2026-08-19T13:46:32+09:00","updated_at":"2026-08-19T13:46:32+09:00","license":"cc_by","translation_status":"reviewed","available_locales":["ko","en","ja","es"],"data_locales":["ko","en","ja","es","id","pt","zh-hant","de"],"url":"https://injoys.com/en/articles/bank-of-korea-physical-gold-purchase-2026"}