[DiaryPoint = Reporter Kim Jeong-hun] China’s gold holdings reached 78.3 million troy ounces at the end of October, up 830,000 ounces (about 25.8 tons) from a month earlier. The figure appeared in statistics released by China’s State Administration of Foreign Exchange on November 7, marking 24 consecutive months of purchases.
The increase was reported as the largest monthly gain since September 2023. China’s net purchases totaled about 129 tons from January through October this year. Yet international gold prices fell about 7% in October, ending the month below $4,000 an ounce.
Central banks support demand, but interest rates move prices
Central banks buy gold as they manage foreign exchange reserves, but prices are also shaped by investor flows, the dollar’s value and expectations for interest rates. Gold pays no interest, so rising rates can increase the opportunity cost of holding it compared with interest-bearing assets. Investing.com reported that inflation concerns driven by energy prices fueled expectations of tighter policy, putting downward pressure on gold in October.
In its 2026 mid-year outlook, the World Gold Council said that a larger number of central banks buying gold does not necessarily mean each country will buy more. Central bank purchases support demand, but a single month’s buying figure is not enough to predict where gold prices will go or when Korean investors should buy.
For ETFs, check fees and tracking; for bank gold accounts, check FX and spreads
Korean gold ETFs differ in the indexes they track and the costs they charge. ACE KRX Gold Spot, according to its Korea Exchange disclosure, has a total annual expense ratio of 0.19%. The disclosure also notes that tracking error can arise between the underlying index and the ETF’s return. Before trading, investors should review the fund’s total expenses and underlying assets, as well as the premium or discount between its market price and indicative net asset value (iNAV).
Gold bank accounts are linked to international gold prices converted into Korean won, so the won-dollar exchange rate also affects returns. Shinhan Bank’s investment guide gives an example in which the purchase price is set 1% above the benchmark rate and the selling price 1% below it. Actual fees and preferential rates vary by product, so check the buy-sell price spread shown at enrollment and any fee for withdrawing physical gold.
For physical gold, compare sales prices and VAT
Gold on the Korea Exchange’s KRX Gold Market trades in 1-gram units, with brokerage fees applying to on-exchange trades. The exchange says withdrawals of physical gold are subject to 10% value-added tax and a withdrawal fee. Buyers of gold bars should also work out their break-even price after accounting for the seller’s buyback spread, VAT, and manufacturing and distribution costs.
KRX Gold Market prices reflect international gold prices, exchange rates and domestic supply and demand. Even when international gold prices fall, a weaker won or changes in local supply and demand can affect prices in Korean won differently. Investors will be weighing China’s next monthly reserve figures alongside the actual buy and sell quotes and costs for the product they choose.