The National Bank of Poland (NBP) has been steadily increasing its gold reserves, aiming for the precious metal to comprise 20% of its total reserves. This aggressive accumulation strategy has positioned Poland as a leading gold buyer among central banks in 2024, tied with India after acquiring around 19 tonnes of gold in the second quarter.
As of the end of the second quarter, Poland’s gold reserves reached 377.4 tonnes, marking a significant rise driven by the NBP’s purchases, mostly stored at the Bank of England. This surge in gold acquisitions reflects a broader trend among central banks, which have been ramping up their gold holdings as a safeguard against economic and geopolitical uncertainties.
Central banks value gold for its stability during times of crisis and its role as an inflation hedge. Unlike currencies or other assets that fluctuate with economic conditions, gold maintains its value, making it an ideal tool for diversifying portfolios and ensuring financial security. This has become increasingly important as central banks seek to protect against macroeconomic volatility and geopolitical risks.
In addition to Poland, several other countries have been expanding their gold reserves. Turkey’s central bank added 15 tonnes of gold in the second quarter, bringing its total purchases for the year to 45 tonnes. Other countries, including Jordan, Qatar, Russia, Uzbekistan, Kyrgyzstan, Iraq, and the Czech Republic, also significantly increased their gold reserves.
Conversely, the People’s Bank of China (PBoC) slowed its gold-buying activity in the same period. Nonetheless, global demand for gold remains strong, driven by factors such as persistently high inflation and ongoing geopolitical conflicts like the Russia-Ukraine and Israel-Hamas wars.
The growing interest in gold is also evident among Polish investors, particularly in response to the Russia-Ukraine war and the lingering effects of the COVID-19 pandemic. Many investors fear the possibility of the conflict spreading to Poland and are turning to gold as a safe haven.
As central banks and individual investors continue to turn to gold, its price has remained robust, even surpassing the $2,500 per ounce mark during the second quarter of 2024. Despite some analysts predicting a potential slowdown in gold’s price momentum, we expect the metal to maintain its strong performance amidst ongoing global uncertainties.