sth korea gold purchase

South Korea's central bank has confirmed it has made its first purchase of gold in 13 years.

The purchase of 25 tonnes of gold shows the bank is diversifying its foreign exchange reserves away from the US dollar.

Gold is seen as a safe haven investment when other forms of investment like shares and currencies are more volatile.

It is the first gold purchase by the bank since the Asian financial crisis.

The weakness of the global economic recovery and the debt problems in Europe and the US are both factors boosting the appeal of gold.

Since the financial crisis of 2008 gold has become increasingly attractive and prices have risen to record highs.

In a statement the Bank of Korea said it bought the gold on the global market between June and July bringing its total gold reserves to 39.4 tonnes.

The gold price was not affected by the move.

According to the bank, South Korea now ranks 45th position in the World Gold Council's list of central banks holding gold.

The bank would not comment on whether or not it intends to buy more gold.

From the BBC