South Korea's Central Bank Buys Gold Again After 13 Years, a Signal of Reserve Diversification

The Bank of Korea (BOK) is preparing its first gold purchase in 13 years, acquiring about one ton of domestically produced gold. According to a Seoul Economic Daily report citing Chung Tae-ho of the Democratic Party, a member of the National Assembly's Strategy and Finance Committee, the move marks the start of efforts to diversify the South Korean central bank's reserve assets.

The BOK last bought gold in 2013, before halting purchases due to falling prices and growing political criticism of the policy. Now, with gold prices strengthening again and global uncertainty high, the central bank has chosen to resume accumulating the precious metal. As of the end of August, the BOK's gold reserves stood at 104.4 tons, equal to just 3.4% of total assets at market prices.

Chung sees the decision as a necessary first step to diversify Korea's reserves. "This is an important first step to reduce dependence on certain assets," he said in a statement cited by the outlet. The diversification is seen as crucial amid exchange-rate fluctuations and geopolitical tensions that could affect the value of foreign exchange reserves.

The BOK's move could be a signal for other central banks in Asia, including Indonesia. Bank Indonesia (BI) also holds relatively small gold reserves, about 3.1% of total foreign exchange reserves as of September 2026. If the trend of gold buying by major central banks continues, BI may consider raising the share of gold in its reserve portfolio to strengthen resilience against external shocks.

"The BOK's decision to buy gold again shows that central banks are starting to see gold once more as a strategic hedging asset," said Kim Ji-hyun, a commodities analyst in Seoul, as quoted by Reuters.

The global gold market responded positively to the news. The spot gold price rose 0.5% to US$2,450 per ounce in Asian trading, though it remains within a consolidation range. Analysts expect that if more central banks follow the BOK's lead, gold demand could rise, especially from the official sector that has long underpinned prices.

For Indonesia, the BOK's move could serve as a mirror. With large foreign exchange reserves but a small gold share, there is room for diversification. However, monetary policy and liquidity needs remain the main considerations. Will Bank Indonesia follow South Korea's lead? Time will tell, but the global pressure to strengthen reserves in non-dollar assets is becoming increasingly clear.