Bank of Korea resumes gold purchases as Indian demand remains high

The Bank of Korea has purchased physical gold for the first time in 13 years, a move interpreted by market observers as a potential trend shift aimed at diversifying its currency reserves. This central bank activity coincides with increased interest from private investors in South Korea, where trading volumes on the KRX gold market rose significantly in early August.

In India, the world’s second-largest gold consumer, demand remains high despite record prices. Contrary to typical market behavior where households sell old gold when prices rise, Indian households are increasingly opting to pledge their gold rather than sell it. This has led to a decline in recycled gold supply, which fell to 19 tons in the second quarter of 2026, the lowest level in eleven quarters. Despite high costs, Indian physical gold purchases reached 131 tons in the second quarter, totaling approximately 21 billion US dollars.

On Tuesday, gold prices in India saw a slight decline, with the price per gram falling to 13,507.77 INR from the previous day's 13,585.81 INR.