An employee arranges gold bars at the Korea Gold Exchange in Jongno-gu, Seoul. [Yonhap]
An employee arranges gold bars at the Korea Gold Exchange in Jongno-gu, Seoul. [Yonhap]

Central banks around the world are snapping up gold as prices pause after a near-vertical climb. China, one of the biggest buyers in the gold market, has now added to its reserves for 21 consecutive months, while South Korea has decided to buy gold for the first time in 13 years.

The People's Bank of China held 76.08 million troy ounces of gold as of the end of July, up 640,000 ounces (about 19.9 tonnes) from the previous month, according to recent reports by Caixin and Bloomberg. That was the largest monthly increase since October 2023.

The People's Bank has added to its gold reserves every month since November 2024, surpassing its previous record streak of 18 consecutive months from November 2021 to April 2024 — the longest such run in history.

The buying is widely seen as part of Beijing's effort to reduce its dependence on dollar-denominated assets and diversify its holdings amid intensifying US-China rivalry.

However, the total gold added over the past 21 months amounts to 3.28 million ounces (about 102 tonnes) — roughly one-third of what was accumulated during the previous 18-month streak.

Caixin also reported that amid wider gold price volatility, the market value of China's gold holdings as of end-July had fallen nearly 20 percent from a February peak.

The Bank of Korea made a small gold purchase through ETFs in the second quarter and plans to expand its gold holdings going forward.

The move reflects a reassessment of gold's value as a safe-haven asset amid growing geopolitical uncertainty, as well as a recognition that South Korea's gold share of foreign reserves is low compared with other major economies. The Bank of Korea plans to build its gold position through a range of methods, including ETFs, rather than relying solely on physical bullion.

Central bank appetite for gold shows no sign of fading. A World Gold Council survey found that 89 percent of central bank officials expect global gold reserves to increase over the next year. Buying continued in the first half of this year, led by emerging-market central banks in Poland, Uzbekistan, China and Kazakhstan, among others.


hanira@heraldcorp.com