NB bought over a ton of gold for the reserve. Good move, analysts said

NB has approved a new procedure for gossiping gold stocks, its goal is to keep the volume of gold at a certain level. The purchase of gold for this purpose is intended to ensure the smooth issuance of gold commemorative coins and, in the future, to enable it to fulfill the obligations associated with the Czech Republic’s accession to the European Monetary Union (transfer of an aliquot of gold to the ECB’s chapter). According to gold, the NB’s total foreign exchange reserves will remain low, as the NB has not considered this commodity to be the optimal tool for foreign exchange reserves of modern central banks for a long time, said Markty Fierov, a central bank spokeswoman.

The so-called Gold Index, which expresses the ratio between the seven-ton gold treasure at the creation of the independent Czech Republic and the current state of gold in the NB’s foreign exchange reserves, rose from 11.2 to 12.9 percent, according to analysts at the Zlato.cz website.

The fact that the central bank increased its gold foreign exchange reserves by 39 thousand (1213 kilograms) is a good and very important first, said the director of the company Zlato David Marek. According to him, the World Gold Council considers the purchase or sale of gold, which will grow one tonne in one month, to be called upon.

In this millennium and so far, the NB has never bought gold into its foreign exchange reserves. The position of 1.2 tons of gold represents an intermediate fifteen percent number, and the gold reserves in the central bank were thus shaking at the level of August 2018, he pointed out.

In addition, the NB gold stock is a lavish step, especially due to the uncertainties in world markets, said Marek Brvnk, an analyst at the Golden Gate CZ gold trader.

According to him, the annoyance is the fact that the NB does not behave like a pub and at least like an investor. NB sold tons of tons of gold at the time she was supposed to shop. At the end of the 1990s, the NB spent 16 billion crowns on the sale of gold reserves. If she sold the same amount today, the dog would receive 70 billion crowns, he added.

Breeding response to the situation

According to Mark, the June acquisition of gold in the NB safe will respond to the current trend of breeding central banks. You buy much more gold this year, not sell it, because its price attacks the limit of $ 1,800 per ounce. In the first five months of the year, according to the International Monetary Fund, central banks bought over 206 tons of gold and sold 62 tons at the same time.

Marek also hopes that the NB will continue with at least percentages of gold in foreign exchange reserves, which is recommended by the IMF methodology according to gold in the total foreign exchange reserves of central banks.

While the Polish and Dutch buyers of gold by the central banks of Poland (126 tons) and Hungary (more than 30 tons), due to their volumes, it should not be overlooked that WGC statistics say that in recent years gold spreads treasures and other European states.