Bank of Korea Ends 13-Year Gold Pause With ETF Stake and Domestic Buying Plan

Bank of Korea's Return to Gold: The ETF Stake and the Domestic Bar Plan

South Korea's central bank has reopened a gold chapter it closed more than a decade ago. In a US SEC filing, the Bank of Korea disclosed that it held 679,765 shares of SPDR Gold Trust worth $250.4 million at the end of the second quarter. The position did not appear in its first-quarter filing, and the central bank has not said exactly when it bought the ETF.

The shift ends a 13-year pause in gold accumulation. The BOK last bought physical gold in 2013, when it acquired 20 tonnes. Its official physical stock remains 104.4 tonnes, equivalent to roughly 1.1% of foreign exchange reserves, while dollar assets still account for 69.5% of reserves — well above the 56.8% global average cited in the report.

The BOK is also building a domestic gold-buying channel rather than relying only on overseas purchases. It plans to work with the Korea Exchange, the Korea Securities Depository and domestic producers — mainly LS MNM and Korea Zinc — to buy Korean-made bars. Early purchases are likely to be small: the two companies produce about 40–45 tonnes of gold a year, of which only 4–5 tonnes are exported, and the BOK itself describes the initiative as gradual and long-term.

The government has added a tax incentive. Under the 2026 tax reform plan, the central bank will be exempt from VAT when it withdraws gold bars of 99.99% purity or higher from a custodian starting 1 January. That removes a historical anomaly: most BOK asset purchases are VAT-exempt, but gold has been the exception.

What the BOK's Gold Shift Means for Reserves, Producers and Prices

Why the 13-year pause ended now

The BOK stopped buying after its 2011–2013 purchases — 40 tonnes in 2011, 30 tonnes in 2012 and 20 tonnes in 2013 — were followed by a sharp price decline. Gold fell from $1,675.35 an ounce at the start of 2013 to $1,180.57 during the year, ending a long bull run and drawing political criticism over paper losses. The current return comes only after gold pulled back from an early-2026 record, and the BOK is careful to frame the move as a medium- and long-term reserve strategy, not a bet on short-term prices. The global backdrop helps: central banks bought 289 tonnes in the three months to June, the highest on record for that period, according to World Gold Council data.

A diversification signal with a small demand footprint

The BOK's first disclosed ETF stake is modest — $250 million against total reserves of $427.36 billion. Because the SPDR position is classified as a security rather than physical gold, it does not change the BOK's official physical stock of 104.4 tonnes. Even the planned domestic purchases would initially be limited to the 4–5 tonnes of exportable local production. For the gold market, therefore, the move is more important as confirmation of central bank demand than as a price shock. For the BOK, it is a structural diversification step: cutting exposure to a dollar share well above the global average, while accepting that gold remains a small portion of the portfolio.

The local pipeline: who benefits and what constrains it

LS MNM and Korea Zinc stand to gain a new, price-linked buyer for a portion of their smelter byproduct gold. Purchases would be negotiated block trades at international market prices and stored at the Korea Securities Depository. The structural constraint is domestic supply: with only 4–5 tonnes available for export, the program cannot quickly raise the BOK's 1.1% gold share. The BOK has not disclosed a target ratio, a total budget, or a timetable for exceeding 104.4 tonnes, so the program remains deliberately incremental.

What to Watch as the Bank of Korea Builds Its Gold Framework

• Size the demand realistically: the BOK's disclosed ETF stake is $250m, and the first domestic purchases would be capped by the roughly 4–5 tonnes of exportable Korean output, so the program is unlikely to move global gold prices on its own.
• Track the central bank's filings rather than its statements: the next SEC quarterly filings will show whether the SPDR Gold Trust position grows or is paired with other ETF holdings; the BOK has not disclosed a target gold ratio or total budget.
• Watch the domestic infrastructure milestones: actual buying waits on Korea Exchange and Korea Securities Depository systems, and the VAT exemption for 99.99% bars takes effect on 1 January.
• Follow the two producers: LS MNM and Korea Zinc could gain a stable buyer for 4–5 tonnes per year at international prices once the negotiated block-trade system is operational.