Bank of Korea Just Bought Gold After 13 Years: Is a New Rally Coming?

The Bank of Korea will buy physical gold again after 13 years. Central banks bought 289 tonnes in the second quarter, their strongest second quarter on record.

Gold traded near $4,086 an ounce on Tuesday, up 0.8%. It sits 27% below its January record. It is still up about 20% on the year.

Gold (XAU) Price Performance. Source: TradingView

Korea Gold Purchases Resume After 13 Years

Seoul stopped buying gold in 2013. It was mocked for the timing. The bank bought 90 tonnes between 2011 and 2013, at an average $1,629 an ounce. That came to about $4.7 billion, figures from Korea Economic Daily show.

Then gold fell apart. The price had peaked at $1,920.30 in September 2011. By June 2013 it hit $1,180.71, a drop of 38.5%. That year was gold’s worst since 1981.

South Korea's central bank plans gold purchases – first addition since 2013.2011-2013: Bought near peak, faced criticism when prices fell 2024-2025: Sat out entire rally to record highs2025 now: Re-entering after "correction". Director noting they're "monitoring markets for…

— BullionStar (@BullionStar) October 28, 2025

At that low, Korea’s gold was worth 27.5% less than it paid. Lawmakers dragged in then-governor Kim Choong-soo. By 2015 the paper loss reached about 1.8 trillion won. Buying stopped.

Here is the twist. Those same 90 tonnes are now worth roughly $11.8 billion. That is $7 billion more than Korea paid.

So the bank is careful about how it explains itself. Jung Hee-sub, who runs its Reserve Management Group, denies any link to the recent price drop.

“We did not decide the timing of purchases by looking at a specific price… we decide whether to proceed at that time based on domestic and international gold prices and market conditions,” local media reported.

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The plan itself is tiny. Korea digs up 40 to 45 tonnes a year, mostly as a leftover from smelting copper and zinc. Only 4 to 5 tonnes get sold abroad. The bank will bid for that slice alone.

So its reserves stay near 104.4 tonnes, ranking Korea 39th. It also bought its first gold exchange-traded funds (ETFs) last quarter, as South Korea’s equity turmoil grips policymakers.

Central Bank Gold Buying Hit a Record 289 Tonnes

Korea is late to a crowded party. Central banks bought 288.9 tonnes in the second quarter, World Gold Council data show. That is 62% more than a year earlier.

Poland bought the most, at 51 tonnes. Its stockpile hit a record 632 tonnes. It wants 700.

Governor Adam Glapiński is blunt about how he does it.

“We’ve been consistently buying gold, taking advantage of the recent price drops.”

China added 33 tonnes, keeping up a long buying streak. Russia sold 22.

The rebound hides a slow start, though. Just 56.5 tonnes came in the first quarter. At 345 tonnes, the first half was the weakest since 2022.

They are not losing interest. A record 45% plan to buy more within a year, and demand held firm through the price slump.

Gold Is Quieter Than at Any Time Since August 2025

Bollinger Bands track how widely a price swings around its average. When they squeeze together, the market has gone quiet. Quiet markets rarely stay quiet.

Barchart figures show the tightest squeeze on the biggest gold ETF since August 2025. That date matters. Gold closed August 2025 near $3,443, then ran 62% to its January peak.

Gold is coiling and getting ready for a big move 🚨 🚨 Bollinger Bands are now the tightest since August 2025, right before Gold soared 60% over the next 5 months 🚀 🥳 pic.twitter.com/ChRZ04t8U9

— Barchart (@Barchart) August 4, 2026

One example is not a pattern, however. A squeeze tells you a move is coming. It does not tell you which way.

So Will Gold Break Out?

The evidence leans up, but not back to January’s record. Deutsche Bank analysts Michael Hsueh and Bryant Xu say gold is worth about $4,700 by year end. JPMorgan’s lowered target still puts the fourth quarter at $4,500.

The World Gold Council will not pick a number. Its mid-year outlook sees gold within 5% of $4,100 for the rest of 2026, if nothing much changes.

Here is the catch. Central banks are better at putting a floor under gold than pushing it up. Record buying did not stop a 29% fall from January to June. They buy to a plan, and they buy dips, as Glapiński said.

A real rally needs ordinary investors and funds to come back.

Gold (XAU) Price Outlook. Source: TradingView

So watch $3,959, the June low. Gold sits less than 3% above it. Break that, and the idea that central banks hold up the price falls apart.