Seoul is buying physical gold again for the first time since 2013, joining a record wave of central-bank purchases. Gold trades near $4,086 an ounce, 27% below its January peak, with Deutsche Bank projecting a year-end rebound to about $4,700.
The Bank of Korea will start buying physical gold again, ending a 13-year pause. The bank bought 90 tonnes between 2011 and 2013 at an average $1,629 an ounce, about $4.7 billion in total, according to Korea Economic Daily figures.
Gold trades near $4,086 an ounce, up 0.8% on Tuesday and 27% below its January record, though still up about 20% on the year.
Korea Resumes Gold Buying After 13 Years
Gold fell hard after that first purchase run: the price had peaked at $1,920.30 in September 2011 before dropping 38.5% to $1,180.71 by June 2013, the metal's worst year since 1981. At that low, Korea's holdings were worth 27.5% less than it paid, and lawmakers grilled then-governor Kim Choong-soo before buying stopped.
Now the tables have turned: those same 90 tonnes are worth roughly $11.8 billion, $7 billion more than Korea paid for them. Reserve Management Group head Jung Hee-sub denies that a specific price level set the timing of the new purchases, saying the bank instead weighs domestic and international gold prices and market conditions, local media reported.
The plan itself is modest: Korea mines 40 to 45 tonnes a year as a copper-and-zinc smelting byproduct, and only four to five tonnes get sold abroad — the slice the bank will now bid for. Its reserves will stay near 104.4 tonnes, ranking it 39th worldwide, after also buying its first gold ETFs last quarter amid South Korea's equity-market turmoil.
Central Banks Buy a Record 289 Tonnes in Q2
Korea joins a crowded field. Central banks bought 288.9 tonnes in the second quarter, World Gold Council data show, 62% more than a year earlier.
Poland led the buying at 51 tonnes, pushing its stockpile to a record 632 tonnes on the way to a 700-tonne target. Governor Adam Glapiński said the bank has "been consistently buying gold, taking advantage of the recent price drops."
China added 33 tonnes to a long streak, while Russia sold 22. Just 56.5 tonnes arrived in the first quarter, the weakest first half since 2022. Yet a record 45% plan to buy more within a year.
Will Gold Break Out?
Bollinger Bands on the biggest gold ETF are at their tightest squeeze since August 2025, Barchart figures show — a signal that a large move is coming, though not which direction.
Forecasts lean higher, though not back to January's record. Deutsche Bank analysts Michael Hsueh and Bryant Xu put gold at about $4,700 by year-end. JPMorgan's lowered target puts the fourth quarter at $4,500.
Central banks are better at putting a floor under gold than pushing it higher: record buying did not stop a 29% fall from January to June. A real rally needs ordinary investors and funds to return. The level to watch is $3,959, June's low — gold sits less than 3% above it, and a break below would undercut the idea that central-bank buying holds up the price.
Source: BeInCrypto
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