Czech Republic expands gold reserves

In June, the Czech Republic added gold to its reserves for the first time in more than two decades. added. The central bank bought 1.2 tonnes of gold, expanding its gold reserves to 9 tonnes. For the past twenty years, the central bank has used a small amount of gold to mint commemorative coins. As a result, gold stocks fell from 13.8 tonnes in 2002 to a low of 7.8 tonnes in May. With this purchase, the central bank's gold holdings are back to the level of August 2018.

The Czech Republic joins an increasing group of Eastern European countries that buy gold. In recent years, Poland, Hungary and Serbia precious metal added to their reserves. Poland doubled its gold reserves, while Hungary increased its reserves by a factor of ten. These countries buy the precious metal as a form of diversification and as a hedge against geopolitical risk. We don't know whether that is also the main reason for the Czech Republic to buy gold, but it is obvious that they make a similar decision in the management of their reserves. The gold stock represents less than 0.5% of the Czech Republic's total reserves.

Gold back to home country

In other Eastern European countries such as Slovakia and Romania There are also calls to repatriate gold. More and more countries are withdrawing their gold reserves due to increasing economic and geopolitical uncertainty. Central banks see gold as the safest reserve, because it has no counterparty risk. Incidentally, this argument only applies when it is within the country's borders, as in the case of Venezuela has shown.

The Czech Republic also adds gold to reserves again

This contribution was made from Geotrendlines