Bank of Korea
SEOUL(BullionStreet): Four months after its 25 tons gold purchase, Asia’s fourth largest economy South Korea on Friday said it added 15 more tons of gold to its reserves.
According to the Bank of Korea, the central bank, the move was aimed to hedge against global volatility caused by European and US debt crises.
The purchase was made through London gold markets last month, bringing its total reserves to 54.4 tons at the end of November.
The bank said its gold holdings account for one percent of its foreign-exchange reserves, which stood at $308.63 billion at the end of November, the eighth largest in the world.
However, Korea’s gold reserves remain very low compared to some other Asian nations including China, Japan and India.
Gold has become increasingly attractive to central banks worldwide, and prices have risen sharply since the global financial crisis as it is considered a safe haven while a weaker dollar makes it even more attractive.
The yellow metal has more than doubled since the 2008 meltdown and soared to almost $2,000 an ounce earlier this year, although it has weakened slightly as the dollar has strengthened against the troubled euro.
European central banks have stopped selling gold. China, which has the world’s biggest foreign-currency reserves, has been increasing its gold holdings mainly through domestic producers.
Precarious debt situations in the United States and Europe have boosted the safe-haven appeal of gold, lifting bullion to a series of record highs in July, as investors and central banks chased prices higher.
The central bank of Asia’s fourth-largest economy said that, with prices hovering near historic highs, gold looked less lucrative as an investment but it was the right time to buy gold.