Another major addition to the global “gold buying fever”! The Bank of Korea invested in gold for the first time in 13 years and quietly bought a US$250 million ETF in the second quarter

The Zhitong Finance App learned that the Bank of Korea is taking action to announce its return to the global central bank gold buying camp. According to the 13F document submitted by the Bank of Korea to the US Securities and Exchange Commission (SEC) on August 12, as of the end of the second quarter of 2026, the bank held 679,765 shares of SPDR Gold Trust (the world's largest physical gold ETF), with a market value of about US$250.4 million. This is the first time since 2013 that the Bank of Korea has made a gold-related investment after a lapse of 13 years.

Why choose an ETF over physical gold?

The most notable structural feature of this investment is that the Bank of Korea is not buying physical gold, but a gold ETF. SPDR Gold Trust is a gold ETF listed on the US exchange that tracks changes in the spot price of gold. By the end of the second quarter, the ETF was trading at around $400 per share. This position did not appear in the declaration documents at the end of the first quarter, indicating that the investment was completed between April and June of this year.

According to the Bank of Korea's official statement, gold ETFs are classified as foreign securities and included in the country's foreign exchange reserves rather than official gold holdings. This classification has important accounting and strategic implications — the Bank of Korea's official physical gold reserves remain unchanged at 104.4 tons and have not increased since 2013.

From a practical perspective, ETFs provide higher liquidity and a more convenient way to trade than physical gold. For a central bank that has not been involved in the gold market for 13 years, establishing gold exposure through an ETF is a lower threshold and more flexible way to “test the waters” — not only without having to bear the storage and transportation costs of physical gold, but also retaining the flexibility to adjust positions at any time.

The difference between gold ETFs and physical gold is critical to reserve management: physical gold is usually held as a long-term reserve asset, while gold ETFs can be traded like other financial securities. By opening an ETF position, the Bank of Korea actually increased its foreign exchange reserves exposure to fluctuations in gold prices without changing the official gold reserve statistics.

Why now? ——The strategic shift in the 13-year “golden window period”

The Bank of Korea has now returned to the gold market, ending the 13-year “golden window period.” During this period, central banks around the world set off a wave of gold purchases, and South Korea remained absent.

The reasons behind it are worth pondering. The Bank of Korea stopped additional purchases after purchasing a total of 90 tons of gold from 2011 to 2013. For many years since then, the share of gold in the bank's foreign exchange reserves has remained around 3.5%, ranking only 39th to 40th in the world. Based on foreign exchange reserves of 427.36 billion US dollars at the end of June, gold only accounted for 4.79 billion US dollars, accounting for only 1.1%. This ratio ranks 98th out of 100 countries in the world, only higher than Chile and Colombia.

Faced with this extremely low gold allocation ratio, the Bank of Korea finally made a strategic shift decision in 2026. At the beginning of August, the bank publicly announced that it would increase the share of gold in foreign exchange reserves in the medium to long term and establish a new channel to purchase and export gold from domestic gold suppliers. This is the first time in nearly 60 years that the bank has taken such an initiative.

Choi Kyuho, an economist at Hanwha Investment Securities, commented: “The Bank of Korea currently allocates a very low percentage of gold. From the perspective of aligning with global standards, the Bank of Korea still has room to buy more gold. I think they will gradually increase their gold holdings. ”

Global context: The central bank's purchase of 289 tons of gold in the second quarter reached a record high

The Bank of Korea's turnaround is taking place against the backdrop of the global central bank gold buying boom continuing to heat up. According to data from the World Gold Council, in the second quarter of 2026, global central banks and other official institutions collectively increased their gold reserves by a net of 289 tons, an increase of 62% over the previous year, a sharp increase of 411% over the first quarter, and a record high for the second quarter.

What is more noteworthy is the central bank's forward-looking guidance. According to previous research by the World Gold Council, 45% of the central banks surveyed expect to increase their gold reserves within the next year, and 60 countries expect that global official gold demand will continue to grow over the next five years. This structural demand has provided solid long-term support for the gold market.

Deutsche Bank expects the price of gold to rise to 4,700 US dollars/ounce by the end of the year. However, SPDR Gold Trust fell to the $360 range in mid-July and has now rebounded to about $404.9. When the Bank of Korea opened positions in the second quarter, it happened to be at the beginning of this wave of rebound.

Market Implications: A New Chapter in the Central Bank's “Normalization of Gold Allocation”

The Bank of Korea's investment has sent multiple signals:

First, the process of “normalizing” the gold allocation of central banks around the world is still accelerating. As de-dollarization, geopolitical risks, and inflationary uncertainty continue to rise, more and more central banks are re-evaluating the asset allocation of their foreign exchange reserves. As the 13th largest holder of foreign exchange reserves in the world, the process itself of moving its gold allocation ratio from 1.1% to the global average means considerable incremental demand.

Second, ETFs are becoming a new channel for central banks to allocate gold. Traditionally, central banks increase their gold holdings mainly through direct purchases of physical gold bars. The Bank of Korea's practice of opening positions through ETFs may provide a new reference path for other central banks that have yet to allocate gold on a large scale — especially when they need to quickly establish exposure without disrupting the physical gold market.

Third, the Bank of Korea's “two-step” strategy is worth paying attention to. First use ETFs to establish exposure to gold, then gradually promote physical gold purchases — the domestic gold procurement framework announced in early August shows that ETFs are only the first step. The head of the foreign exchange reserve management department of the Bank of Korea said that geographical risk has become a continuing characteristic of the global environment, and central banks in many countries are diversifying their foreign exchange reserves through gold.