Serbia wants more gold as a hedge against energy crisis

Serbia plans to increase its gold reserves Expandable further, President Aleksandar Vučić declared at the opening ceremony of the Cukaru Peki gold mine. This new gold mine in Serbia was created in collaboration with the Chinese Zijin Mining Group. The central bank will buy up part of the gold production to further replenish its gold reserves. The Governor of the Serbian Central Bank, Jorgovanka Tabakovic, was also present at the opening ceremony.

According to President Vučić, the energy crisis in Europe played a role in the decision to further expand gold reserves. On the advice of the President Bought By the end of 2019, the central bank had already added nine tonnes of gold. As a result, the total gold stock rose to 30.4 tonnes. The central bank now has 37 tons in the vault, but that is apparently not enough. Of this, the President says:

"We need to continue to strengthen our gold reserves so that we are better prepared for the risks facing our country. Who could have foreseen an energy crisis and all those problems in Europe?"

Expansion of gold reserves

Serbia joins an increasing number of European countries adding gold to their strategic reserves. In recent years, countries such as Poland and Hungary have also bought large amounts of gold. Poland doubled its stock, while Hungary even increased its relatively small stock tenfold. Both countries also withdrew a significant part of their gold reserves from their own countries. Serbia's central bank wants to expand its gold holdings to 50 tonnes next year.

Vučić said he has been very concerned about the energy crisis in Europe lately. Gas prices recently rose to Recordwhile strategic gas stocks are relatively low. In the event of a harsh winter, this could lead to problems. It is worth mentioning that he makes the link between natural gas and gold reserves, because the precious metal in the vaults of central banks currently plays no role in the payment system between countries.

Energy crisis in Europe

Natural gas is an important component of the power supply in many European countries, because gas-fired power plants can absorb the fluctuating energy production of solar panels and wind turbines. As European countries generate more energy from wind and solar, these fluctuations in electricity production will increase further. This means that countries will also become more dependent on natural gas to compensate for this.

Gas prices are currently high in the energy market, as there is a high demand for liquefied natural gas from Asia. European countries will be able to import more natural gas from Russia via the now-completed Nord Stream 2 pipeline, but approval from regulators in Berlin and Brussels is still awaited. They must assess whether the new pipeline complies with European legislation in this area, as laid down in the Third Energy Package.

According to Russian President Putin, Europe can get more gas if that approval for Nord Stream 2 is granted. "If the German regulator gives permission for deliveries tomorrow, deliveries of 17.5 billion cubic meters of gas will start the day after tomorrow."

This contribution was made from Geotrendlines