In March this year, everyone was surprised by the news that the National Bank of Poland intends to increase its gold reserves by at least 100 tons in the coming years. Interest in the royal metal has also spread to the Danube. Hungary announced on Wednesday that its reserves had been tripled.
When the President of the National Bank of Poland announced in March this year that Poland intends to increase its gold reserves, it caused quite a stir. Adam Glapiński emphasized that the precious metal is of strategic importance in the perception of the state. Of course, he was referring to the economic power that Poland aspires to. What is more, the President of the NBP emphasized that the gold would be stored in the country. Poland currently has 229 tons of gold, which places us in 22nd place among other central banks in the world.
A similar step was taken in Budapest. On April 7, the Hungarian central bank announced that its gold reserves had tripled. Until now, Hungary had 31.5 tons of the precious metal, but now it has as much as 94.5 tons. This has also moved the country up to 36th place out of 56 in the ranking of reserves held by central banks around the world.
A statement issued by the National Bank of Hungary reveals that this strategic move is aimed at increasing confidence in the country in economic relations and emphasizing that gold remains a key global reserve asset, alongside bonds, of course. Furthermore, it was noted that this action is a response to the growing crisis in the markets caused by the COVID-19 pandemic. It is worth noting that this is the second such significant purchase of gold in recent years for Hungary. In October 2018, reserves were increased from 3.1 tons to 31.5 tons.
According to analysts, the purchase of gold by nation states is a good move, based on long-term economic action and analysis. The fact that central banks are rapidly expanding their gold reserves, treating it as an important asset, is also having a significant impact on the capital market. Today, we are increasingly willing to invest our savings in precious metals. Thus, precious metals are no longer an exclusive and niche form of capital investment.
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