As financial markets increasingly make the switch from fiat money to cryptocurrencies, central banks have instead embarked on a gold-buying spree, particularly during times of economic uncertainty.
According to data from the World Gold Council, gold reserves grew 333.2 tons in the first half of the year, marking a 39% increase compared to the 5-year average. Despite this, though, gold prices have struggled to hit their pandemic peak of $2,000 per ounce, and have instead receded to around $1,700 throughout the summer.
With inflation accelerating and fears mounting over price pressures become more permanent, central banks are preparing to dial back their unprecedented monetary stimulus. But, it appears that the National Bank of Poland has ulterior motives, and plans to continue taking advantage of the decline in gold prices.
According to an interview with local newspaper Gazeta Wroclawska, National Bank of Poland governor Adam Glapinski revealed that the central bank will raise its gold reserves by 100 tons in 2022 in an effort to boost the country’s financial position. Glapinski said the gold buying spree will likely commence once he is re-elected as the central bank’s governor mid-next year. However, he did also hint that he may introduce a 1,000 zloty banknote, suggesting that the forthcoming gold purchases will serve as a way to outweigh additional monetary stimulus later on.
Information for this briefing was found via the Gazeta Wroclawska and the World Gold Council. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
