Bank Of Korea Just Bought Gold After 13 Years: Is A New Rally Coming?

What Happened

The Bank of Korea will buy physical gold again after 13 years. Central banks bought 289 tonnes in the second quarter, their strongest second quarter on record.

Gold traded near $4,086 an ounce on Tuesday, up 0.8%. It sits 27% below its January record. It is still up about 20% on the year.

Korea Gold Purchases Resume After 13 Years

Market Context

Then gold fell apart. The price had peaked at $1,920.30 in September 2011. By June 2013 it hit $1,180.71, a drop of 38.5%. That year was gold’s worst since 1981.

So the bank is careful about how it explains itself. Jung Hee-sub, who runs its Reserve Management Group, denies any link to the recent price drop.

“We did not decide the timing of purchases by looking at a specific price… we decide whether to proceed at that time based on domestic and international gold prices and market conditions,” local media reported.

“We’ve been consistently buying gold, taking advantage of the recent price drops.”

They are not losing interest. A record 45% plan to buy more within a year, and demand held firm through the price slump.

Bollinger Bands track how widely a price swings around its average. When they squeeze together, the market has gone quiet. Quiet markets rarely stay quiet.

Why It Matters

Seoul stopped buying gold in 2013. It was mocked for the timing. The bank bought 90 tonnes between 2011 and 2013, at an average $1,629 an ounce. That came to about $4.7 billion, figures from Korea Economic Daily show.

At that low, Korea’s gold was worth 27.5% less than it paid. Lawmakers dragged in then-governor Kim Choong-soo. By 2015 the paper loss reached about 1.8 trillion won. Buying stopped.

Details

Here is the twist. Those same 90 tonnes are now worth roughly $11.8 billion. That is $7 billion more than Korea paid.

Follow us on X to get the latest news as it happens

The plan itself is tiny. Korea digs up 40 to 45 tonnes a year, mostly as a leftover from smelting copper and zinc. Only 4 to 5 tonnes get sold abroad. The bank will bid for that slice alone.

So its reserves stay near 104.4 tonnes, ranking Korea 39th. It also bought its first gold exchange-traded funds (ETFs) last quarter, as South Korea’s equity turmoil grips policymakers.

Central Bank Gold Buying Hit a Record 289 Tonnes

Korea is late to a crowded party. Central banks bought 288.9 tonnes in the second quarter, World Gold Council data show. That is 62% more than a year earlier.

Poland bought the most, at 51 tonnes. Its stockpile hit a record 632 tonnes. It wants 700.

Governor Adam Glapiński is blunt about how he does it.

China added 33 tonnes, keeping up a long buying streak. Russia sold 22.

The rebound hides a slow start, though. Just 56.5 tonnes came in the first quarter. At 345 tonnes, the first half was the weakest since 2022.

Gold Is Quieter Than at Any Time Since August 2025

Barchart figures show the tightest squeeze on the biggest gold ETF since August 2025. That date matters. Gold closed August 2025 near $3,443, then ran 62% to its January peak.

One example is not a pattern, however. A squeeze tells you a move is coming. It does not tell you which way.