Bank of Korea to Buy 1 Ton of Gold for First Time Since 2013 as Seoul Adds 18,000 Housing Units

The Quick Take

• The Bank of Korea plans to purchase approximately 1 ton of physical gold in December 2026, its first physical gold acquisition in 13 years worth approximately 195 billion Korean won.
• South Korea's government has also designated 11 new urban redevelopment sites in Seoul to supply 18,000 housing units by 2030, addressing chronic undersupply in the capital.
• Shinhan Bank was named the top-ranked Korean bank in customer satisfaction for the 13th consecutive year, reinforcing its dominant retail banking franchise position.

The Bank of Korea announced plans to purchase approximately 1 ton of physical gold by December 2026, marking its first physical gold acquisition since 2013. The purchase, valued at approximately 195 billion Korean won based on current international spot prices, follows the central bank's earlier investment in gold exchange-traded funds and signals a deliberate effort to diversify foreign reserve assets away from concentration in US dollar-denominated holdings. The decision aligns with a broader global trend of central bank gold accumulation, driven by elevated Middle East conflict risk, rising US Treasury yields, and geopolitical uncertainty that has reduced the attractiveness of holding large dollar reserves.

The Bank of Korea's return to physical gold buying after 13 years signals a strategic recalibration of its reserve composition at a moment when major central banks globally have been net gold buyers for several consecutive years. A 1-ton purchase is modest relative to total Korean foreign reserves but establishes a precedent for ongoing gold accumulation. The Seoul government's designation of 11 new urban redevelopment sites targeting 18,000 housing units addresses a structural undersupply problem that has driven residential property price inflation across the capital, with the supply program expected to stabilize long-term price expectations even if near-term construction timelines remain tight.

The key watch points for Korean markets are the Bank of Korea's next monetary policy committee decision, which will indicate whether gold diversification accompanies any shift in FX reserve management strategy, and the quarterly housing supply delivery timelines from the Seoul metropolitan government. Domestic gold demand from the central bank could provide modest support for gold spot prices globally if the purchase is executed in spot rather than futures markets. Korean bank sector performance — particularly Shinhan and peer financials — will be tested by Q3 net interest margin data as the rate cycle impacts retail deposit and loan pricing.

Synthesized from 5 sources.