The programme
The Bank of Korea has begun a long-term programme of domestic gold purchases, having held its bullion position broadly static since the early 2010s. Sourcing domestically rather than through the London market is the distinguishing feature.
Domestic sourcing keeps the transaction out of international price discovery and supports the local refining and recycling chain. Several Asian central banks have adopted the same approach for the same two reasons.
Why now
Reserve managers who avoided gold through the last cycle carried an opportunity cost that is now difficult to defend internally. Adding at these levels is uncomfortable, but a zero-growth allocation has become the harder position to justify to a board.
The strategic argument is separate from the price argument: reserves held in a non-issued asset carry no counterparty and no sanction exposure. That has been the dominant driver of official demand since 2022 and it has not weakened.
Scale check
Do not overstate the tonnage. Korea's programme will not move the market by itself. Its significance is as a template: if two or three more mid-sized reserve managers announce comparable domestic programmes, the aggregate becomes material to annual balance.