Central European banks are buying gold in large quantities. Among them is the Czech one – Novinky

Executive Bloomberg he said that during the tenure of the current governor Aleš Michl, the amount of gold in the foreign exchange reserves of the CNB has doubled. Michl took office in 2022. His goal is to collect around one hundred tons of gold. According to its data, the Central Bank owned 48.8 tons at the end of October.

The governor said that the bank buys gold, among other things, to spread the risk of its investment and to protect itself from possible large movements in the stock markets. “For these reasons, we need an asset that has nothing to do with stocks. That’s gold,” said Michl.

In the second quarter, the CNB expanded its foreign reserves by 5.9 tons of gold, and in the third, it added another 7.3 tons.

The Czech central bank is therefore one of the most active in the world. Poland buys the most gold. In the second quarter, it even increased its reserves by 18.7 tons. Indian central bankers also bought the same amount.

Other European countries have also significantly increased their gold reserves in recent years. For example, the central bank of Hungary or Serbia bought gold.

Institutional management sees gold as a hedge against geopolitical shocks, among other things. The impetus for the expansion of gold reserves, for example, was the war in Ukraine.

The price of gold has risen this year due to strong demand. Since the beginning of this year, the value of the product has increased by more than a quarter. On Thursday afternoon, it hovered around $2,650 per troy ounce.

It follows from the predictions of J&T Bank analysts that, due to the increase in central banks’ interest, price growth can be expected to continue. Economists from investment bank Goldman Sachs have a similar view. Accordingly, the price of the commodity may rise to three thousand dollars per troy ounce by the end of next year.