South Korea spent more than US$1 billion in its first gold purchase in more than a decade, as uncertainty about global growth and sovereign debt push central banks around the world to diversify foreign reserves.
A brittle global economic recovery and precarious debt conditions in the US and Europe have boosted the safe-haven appeal of gold, lifting the bullion to a record high on Friday.
The Bank of Korea said in a statement yesterday it bought 25 tonnes of gold over the past two months, raising its gold holdings to 39.4 tonnes, news that helped lift spot gold by about US$6 from late Monday.
Photo: Reuters
Reserve currencies, like the US dollar and euro, “have been losing their clout since the recent global financial crisis partly due to abnormal monetary policy adopted in many countries and fiscal deficit problems,” said a central bank official who declined to be named because he was not authorized to speak to the media.
Data on 27 major economies from the Bank for International Settlements shows the US dollar’s inflation-adjusted real effective value has dropped by 10 percent in the past two years and the euro has lost 6 percent, reflecting the sharp increase in the amount of each currency in circulation.
South Korea’s gold holdings remain far smaller than that of other Asian central banks, with China, which ranks sixth globally, the biggest with 1,054.1 tonnes by the end of May, according to World Gold Council data.
Japan, No. 9 globally, has 765.2 tonnes of gold, or 3.3 percent of its total reserves, and 11th-ranked India has 557.7 tonnes, or 8.7 percent.
With prices hovering near historic highs, the central bank of Asia’s fourth-largest economy said gold looked less lucrative as an investment, but it was the right time to buy the precious metal because its foreign reserves had risen above US$300 billion.
The news helped boost gold prices, with spot up 0.4 percent at US$1,623.94 an ounce at 5:28am. Gold hit a record high of US$1,632.30 on Friday.
“Any news about central banks buying gold reassures consumers and other major players who are already looking at gold as an investment,” said Jeffrey Pritchard, an analyst at California-based commodities futures and options brokerage Altavest Worldwide Trading.
The increased gold holding would put South Korea in 45th position in the World Gold Council’s list of central banks holding gold, up from 56th previously, the Bank of Korea said.
The US has the biggest gold holding in its reserves, at 8,133.5 tonnes, or 74.7 percent of total reserves, according to the council’s report last month. Germany is a distant second with 3,401 tonnes, or 71.7 percent of its total reserves.
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
EXPORT GROWTH: The AI boom has shortened chip cycles to just one year, putting pressure on chipmakers to accelerate development and expand packaging capacity Developing a localized supply chain for advanced packaging equipment is critical for keeping pace with customers’ increasingly shrinking time-to-market cycles for new artificial intelligence (AI) chips, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday. Spurred on by the AI revolution, customers are accelerating product upgrades to nearly every year, compared with the two to three-year development cadence in the past, TSMC vice president of advanced packaging technology and service Jun He (何軍) said at a 3D IC Global Summit organized by SEMI in Taipei. These shortened cycles put heavy pressure on chipmakers, as the entire process — from chip design to mass
People walk past advertising for a Syensqo chip at the Semicon Taiwan exhibition in Taipei yesterday.
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
RSS