The Bank of Korea has quietly moved into gold-backed exchange-traded funds for the first time in over a decade. A U.S. Securities and Exchange Commission filing shows the central bank held 679,765 shares of SPDR Gold Shares at the end of June, worth $250.4 million.
What the filing shows
The position is part of a broader portfolio of four holdings totaling $3.89 billion, with gold making up roughly 6.4% of that disclosed stash. Three months earlier, the BOK reported no gold ETF position at all. The shares sit inside South Korea's foreign-exchange reserves, a separate bucket from the country's physical bullion stockpile, which has stayed at about 104.4 tons since 2013.
This is the central bank's first gold-linked investment since 2011, when it last bought the metal. The move comes as other central banks have been loading up on gold at a record pace.
Central banks are buying gold like never before
The World Gold Council says central banks added a net 289 tons of gold in the second quarter of 2024, the strongest second quarter on record. Poland led the pack with 51 tons. China added about 20 tons in July alone. The BOK's last physical gold purchase was in 2013, when it bought 20 tons.
Gold-backed funds also saw $3 billion in inflows in July, snapping a two-month streak of outflows. That suggests the BOK isn't alone in turning back to gold as a hedge.
Why now?
The BOK hasn't explained the ETF purchase in detail. But in August, it said it had built a framework for domestic gold purchases — the first such step in nearly six decades. That framework could make it easier for the central bank to buy physical gold locally, though it hasn't announced any immediate plans.
The ETF position is small relative to the BOK's total reserves, which exceed $400 billion. Still, it marks a shift in strategy after years of standing pat on gold.
Whether the BOK expands its gold holdings — through ETFs or physical bars — will depend on market conditions and its own policy goals. The central bank's next quarterly disclosure will show if it added to the position or sold it off.
