Bank of Korea to Resume Gold Buying After 13 Years

Key Point

The Bank of Korea plans to restart physical gold purchases after stopping in 2013. The bank will bid only for the 4 to 5 tonnes of domestically mined gold sold abroad each year. Jung Hee-sub said the bank did not decide purchase timing by looking at a specific price. World Gold Council data show central banks bought 288.9 tonnes in the second quarter, 62% more than a year earlier.

Market Sentiment

Cautiously Bullish, Macro-driven, Range-bound.

Reason: The Bank of Korea's plan to restart gold purchases after 13 years supports demand expectations but does not confirm a sustained rally.

Similar Past Cases

Central-bank reserve buying often supports commodity demand more than it creates immediate breakout momentum. The difference is that the current purchase plan appears small, so private investor demand may matter more for direction.

Ripple Effect

Reserve diversification could reinforce demand expectations for gold and related safe-haven trades. If reserve purchases continue during price weakness, traders may read gold drawdowns as better supported.

Opportunities & Risks

Opportunities: Investors can monitor whether official reserve demand remains steady during pullbacks; steady demand would support the floor argument for gold.

Risks: Investors can monitor the June low at $3,959; a break below that level would weaken the central-bank support narrative.