Bank of Korea Readies First Bullion Purchase Since 2013 as ETF Demand Runs to Ten Straight Weeks

Bank of Korea plans its first physical gold purchase since 2013 in December, while gold ETFs log a tenth straight week of net inflows.

Gold is drawing fresh institutional support on two fronts, with South Korea's central bank preparing to re-enter the physical market and exchange-traded funds extending a buying streak that has now stretched through ten consecutive weeks.

The metal changed hands at $4,169.98 an ounce on Thursday, a modest gain of 0.3% on the day, as investors held back ahead of Friday's US September employment report.

Seoul to Buy Domestically Sourced Metal in Won

According to Reuters, the Bank of Korea intends to add physical gold to the country's official reserves in December — its first such purchase since 2013. The trading, custody and settlement infrastructure at the Korea Exchange is scheduled to be operational by December 14. Roughly one tonne of gold from domestic producers is planned, worth about 200 billion won.

The transaction will be settled through block trades conducted directly in the local currency. That structure lets the central bank redirect metal destined for export into its own reserves without drawing down foreign exchange holdings.

As of the end of August, the Bank of Korea held 104.4 tonnes of gold, equal to 3.4% of the market value of its total reserves. The move underscores that monetary authorities remain committed to holding physical metal, following net central bank purchases of 289 tonnes worldwide in the second quarter.

Soft Inflation Data Eases the Rate Squeeze

The broader backdrop for the non-yielding metal remains demanding. At current levels, gold sits 26% below its 52-week high, a reflection of the pressure endured in recent months. Hawkish signals from the Federal Reserve about a week ago knocked the price lower, and the quote has shed 2.7% since.

Revised US inflation figures have since brought some relief to rate markets. The core personal consumption expenditures index rose 3.0% year-on-year in August, below market expectations. Goldman Sachs responded by pushing its forecast for the next Federal Reserve rate move from October to December, while its analysts also see the possibility that no further tightening materializes at all.

Capping any vigorous rebound are elevated US Treasury yields and a firm dollar. With Friday's September jobs report looming, market participants are treading carefully, wary that strong hiring data could quickly harden the rate outlook once more.

ETF Inflows Defy the Yield Headwind

Rate and bond market resistance is meeting persistent buying interest from investors. The World Gold Council reported that physically backed gold ETFs notched a tenth straight week of net inflows. Data released Monday put the prior week's inflows at $1.72 billion against redemptions of $1.59 billion.

The streak solidified a trend already visible in late summer. For August, the World Gold Council recorded global net inflows of $18 billion, with fund holdings rising 121 tonnes to a total of 4,189 tonnes. The purchases reflect institutional investors' continued appetite to shield portfolios against monetary policy and geopolitical risks.

Central Banks and Politics Add a Second Pillar

Alongside the ETF complex, central banks are steadying the market through consistent buying. The council put net central bank purchases for the second quarter of 2026 at 289 tonnes. A planned summit between Donald Trump and Xi Jinping is also focusing institutional attention on the commodity as a hedging tool.

On that basis, market watchers are looking ahead to coming quarters with confidence. Experts expect central bank buying to average 50 tonnes per month over the full year.