Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
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South Korea is breaking a nearly decade-and-a-half-long drought of no official gold purchases. Recently, the Asian country’s central bank announced formal plans to add to its physical reserves, citing a combination of geopolitical and economic risks. Rather than a one-off purchase, officials report the plan to accumulate gold is a long-term project.
This meaningful shift in South Korea’s reserve strategy mirrors a global trend of countries, especially in emerging markets, proactively expanding their physical gold stockpiles to hedge against broad-scale volatility and fundamental changes. China, for instance, has been steadily expanding its own reserves in recent years.
Inside the BOK’s New Gold-Buying Program
On August 3, the Bank of Korea (BOK) released details of the new program, formally setting the stage for renewed domestic physical gold purchases after a 13-year hiatus. Although no official transaction schedules or amounts were disclosed, the BOK said the program would increase its gold holdings and support the management of its foreign reserves.
The central bank’s Reserve Investment Division Director Heung-Soon Jung telegraphed the move in late 2025 during the LBMA Global Precious Metals Conference, noting that the BOK was considering additional purchases from a “medium- to long-term perspective.”
Throughout the first half of 2026, officials built out the necessary systems behind the scenes by opening accounts to purchase overseas gold exchange-traded funds (ETFs) and working with local gold producers.
How Much Gold Does South Korea Hold?
South Korea’s official stockpile has remained unchanged since 2013, standing at 104.4 tonnes. Notably, this is comparatively low compared to the gold reserves of other countries. In fact, these holdings rank 39th on the global stage. Virtually all of South Korea’s current holdings came from a series of purchases between 2011 and 2013.
As the nation’s economy rapidly expanded, those holdings represented a progressively lower percentage of total reserves. In 2026, gold is only about 1.1% of South Korea’s reserves by book value. By contrast, developed economies hold about 30% of their reserves in gold on average.
Notably, the BOK had already begun increasing its gold exposure before unveiling the domestic purchasing program. An SEC filing showed the central bank held roughly $250 million in a U.S.-listed gold ETF as of the end of June.
The Forces Behind South Korea’s Gold Shift
South Korean officials cited a convergence of market opportunism, geopolitical instability, economic uncertainty, and monetary policy shifts as the core reasons behind the country’s return to gold. Based on official documents and public commentary, the bank’s decision to resume its gold purchases has four main motivations:
Reserve Diversification
Upon announcing its decision to buy gold, the BOK stated that the goal was to boost its holdings of the precious metal. Rather than representing a temporary move, officials have signaled plans to continue buying gold over the long run.
Furthermore, the central bank is leveraging physical gold to achieve greater portfolio diversity in its management of foreign reserves. In addition to diversifying its reserve assets, the BOK is broadening how it gains gold exposure, combining overseas gold-backed investments with a new channel for purchasing physical gold from domestic producers.
Buy-the-Dip Opportunity
The BOK originally hesitated to invest further in gold because officials expected it to generate lower returns than stocks and other mainstream assets. Since then, however, gold prices have risen by more than $3,000/oz.
After years of sitting out gold’s advance, BOK officials began signaling that they were waiting for a more attractive entry point while reconsidering the metal’s role in their reserves. Gold’s recent price correction appears to have provided an opportunistic entry point.
Hedge Against Inflation & Dollar Weakness
In late 2025, head of the BOK’s Reserve Investment Division Heung-Soon Jung plainly stated that the central bank was planning to expand its reserves into physical gold due to its “role as an inflation hedge and its potential as an alternative investment to the U.S. dollar.” Gold has recently overtaken the euro in official reserves, underscoring how central banks are rethinking the dollar’s dominance.
Other commentary from financial leaders in the country has referred to the rise of geopolitical risk as a catalyst in investment practices. The BOK’s plan to make this shift permanent suggests officials expect these macroeconomic and geopolitical risks to persist over the long term.
Supporting Domestic Producers Without Disrupting Retail Prices
The BOK also structured the program to avoid competing with everyday South Korean gold buyers. Rather than purchasing on the open domestic market, the central bank is sourcing gold exclusively from local producers’ export-bound supply â primarily LS MnM and Korea Zinc, which together generate an estimated 4 to 5 metric tons of gold annually earmarked for export. By redirecting that export-bound gold into its own reserves instead, the BOK can build its holdings gradually without adding buying pressure to the domestic retail gold market.
This design reflects a deliberate, incremental approach. Officials have described the framework as “gradual and long term,” signaling that South Korea intends to rebuild its gold-buying capabilities steadily rather than through a single large purchase.
What It Means Going Forward
South Korea’s return to gold buying adds another data point to a broader pattern: central banks, particularly in emerging and export-driven economies, are rethinking how much of their reserves should sit in gold versus the U.S. dollar and other fiat assets. Surveys of reserve managers show central banks are expected to keep buying at a near-record pace in the years ahead. With holdings still near 1% of reserves by book value, the BOK has considerable room to grow before it approaches the roughly 30% average held by developed economies.
For individual investors, the shift is a reminder that even conservative, government-run institutions are treating physical gold as a long-term strategic asset rather than a speculative bet. Whether that trend continues will depend on how geopolitical and monetary conditions evolve, but for now, South Korea has made clear it intends to keep building its position.