The Bank of Korea joined Russia and Kazakhstan in boosting gold holdings, even as the metal had its worst start to a year since 1991 and billionaire investor George Soros cut his stake in the biggest bullion exchange-traded fund.
The BOK added 20 metric tons in February, raising its gold reserves by 24 percent to 104.4 tons, it said in a statement today. Holdings rose about $1.03 billion by value to $4.79 billion at the end of last month, equivalent to 1.5 percent of total foreign exchange holdings, according to the statement.
Russia and Kazakhstan expanded bullion reserves for a fourth straight month in January and the World Gold Council expects central banks to remain strong buyers this year after increasing purchases in 2012 by the most in almost five decades. Banks from Goldman Sachs Group Inc. to Credit Suisse Group AG predict the metal’s 12-year bull market may be unwinding after five straight monthly losses.
“They are buying gold for a long-term commodity that they can put into their portfolios,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “The timing of their entry into the market can sometimes be quite contrary to what’s happening price-wise.”