03 Oct 2018
Poland has made its biggest gold purchase in 20 years, according to data provided by the International Monetary Fund.
As prices dropped, Poland added nine metric tons to its gold deserves in July and August – the largest purchase since 1998. Based on current gold prices, the purchase is worth around $355 million.
Marcin Mazurek, mBank SA senior economist, told Bloomberg: “The NBP [National Bank of Poland] reserve management policy is based on diversification. Perhaps the basic criterion is the low price of the gold, combined with the expectation for higher global inflation.”
Russia has been the biggest gold buyer in 2018, followed by Turkey and Kazakhstan – whilst although Poland still ranks outside the 30 biggest holders, the country’s bullion reserves are now at the highest they’ve been since 1983.
According to Matthew Turner, a strategist at Macquarie Group in London, Poland’s purchase “suggests gold’s appeal to central banks might be widening.”
Meanwhile, Natalie Dempster, World Gold Council managing director of central banks and public policy, pointed out that recent purchases could be associated with countries moving away from the U.S. dollar.
“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.”