Poland Re-Engages With Gold After Biggest Purchase In 20 Years
(Kitco News) - Poland has embraced gold this summer, purchasing the yellow metal at a pace not seen in 20 years, according to the International Monetary Fund data.
Taking advantage of lower prices, the European country added nine metric tons to its gold reserves in July and August, which marked the biggest acquisition since 1998. The purchase is valued at around $355 million based on current gold prices.
“The NBP [National Bank of Poland] reserve management policy is based on diversification,” mBank SA senior economist Marcin Mazurek told Bloomberg. “Perhaps the basic criterion is the low price of the gold, combined with the expectation for higher global inflation.”
Even though the country’s gold holdings are still not even in the top 30, the purchase bumped the Polish bullion reserves to the highest level since 1983. Poland’s gold reserves now stand at 112.3 metric tons.
Central banks have been continuing to buy gold this year, with Russia, Turkey, and Kazakhstan being the most prominent gold buyers in 2018.
The move to buy more gold could be associated with countries projecting a global move away from the U.S. dollar, said World Gold Council managing director of central banks and public policy Natalie Dempster.
“Central banks have three main objectives when they are thinking about reserve assets: to keep their assets safe, to keep their assets liquid and to generate returns,” she told Bloomberg. “Gold can help to meet all three policy objectives.”
Poland’s National Bank is yet to make a public comment about the purchase.