The Bank of Korea, which has the world’s seventh-biggest foreign-exchange reserves, boosted gold holdings for the first time this year.
The central bank bought 16 metric tonnes last month, boosting reserves to 70.4 tonnes, according to Lee Jung, head of the investment strategy team at the bank’s Reserve Investment Division. Holdings increased by $810 million to $2.98 billion, or the equivalent of 0.9 percent of total reserves, the bank said in a statement today.
Central banks are expanding reserves after bullion appreciated for 11 consecutive years as investors sought a hedge against everything from accelerating inflation to Europe’s debt crisis to slumping equities. Central-bank purchases this year will probably exceed the 456 tonnes added in 2011, the World Gold Council estimates.
The Bank of Korea bought 25 tonnes over a one-month period from June to July last year, the first purchases in more than a decade, and added a further 15 tonnes in November, joining other emerging-market countries in expanding holdings to guard against currency volatility and to diversify portfolios.
Central banks and the International Monetary Fund are the largest bullion owners with 29,500 tonnes at the end of last year, or 17 percent of all mined metal, council data show.
Gold for immediate delivery gained 3.2 percent this year and traded at $1,613.35 an ounce at 8:42 p.m. in Seoul yesterday. Prices averaged $1,593.68 last month and reached a record $1,921.15 in September.