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PR Newswire
11-07-2019, 07:49 PM
Poland joins Hungary with Huge Gold Purchase and Repatriation
With a variety of the world’s central banks going on a gold buying spree in recent years such as Russia and China, there has unsurprisingly been no shortage of newsflow in this area for the world’s financial media to comment on. But even in such an environment of abundant sovereign gold purchases, a number of buying bombshells have stood out for their intensity and ‘shock and awe’ abruptness. Particularly from nations which on the surface might seem like unlikely gold buyers.
One of these was the announcement last October by Hungary’s central bank, that after 32 years of holding unchanged gold reserves, it had rapidly increased its monetary gold holdings by 1000% or 10 fold, from 3.10 tonnes to 31.5 tonnes, and also repatriated (brought home) his entire holding from London to Budapest, away from the clutches of the Bank of England.
At the time we asked: “With almost all of Poland’s gold held at the Bank of England, a relevant question now is how long before Poland also sees fit to repatriate its gold in physical form away from the fractionally-backed LBMA controlled gold trading centre of London. “
The answer to this question was, not long at all.
- The NBP’s management board made a strategic decision to significantly increase the central bank’s gold reserves. This decision was then implemented by the NBP.
- Over 2018-2019 the central bank bought 125.7 tonnes of gold and now has 228.6 tonnes of gold.
- Of the 125.7 tonnes, 100 tonnes were purchased in 2019 and 25.7 tonnes in 2018. Notably, the entire 125.7 tonnes was bought ‘in the last 12 months’.
- The NBP has decided to bring back ‘almost half’ of its gold (which is all stored at the bank of England in London) and store this repatriated gold domestically in the NBP’s vaults.
Poland’s gold holdings as a percentage of total reserves was also, it says, below average.
For example, as of June 2019, when Poland was still reporting 128.6 tonnes of gold held, this represented 4.7% of its reserve assets.
In comparison, the average for all central banks globally is 10.5% according to the NBP, and 20.5% for European countries.
For Euro area countries, gold as a percentage of reserves assets is even higher, at 53.6%, pulled up especially by the large claimed gold holdings of Germany, France and Italy.
Although the official language in the press release is diplomatic, the NBP makes it clear that there is real risk to holding its gold in London, something that was also clear in the repatriation decisions of central banks such as Hungary and Austria, and perhaps crystallized by the Bank of England’s brazen confiscation of Venezuela’s gold in London last year.
Conclusion
As two of the most independently minded countries in the present day European Union, which are both thorns in the side of the European federalists, the physical gold buying and gold repatriations by the Poles and Hungarians are intriguing to say the least. No other EU states have made such huge and dramatic gold purchases for decades. Could the huge gold purchases and repatriations by the Poles and Hungarians be signalling a skirmish in the two countries’ battle with the EU elites? Because don’t forget, the EU is raging at both countries and even plans to put them under economic sanction.
Poland and Hungary also still use their own currencies, the zloty and forint, respectively, and while their central banks are members of the ESCB, neither are part of the Euro and fully answerable to the ECB. Which also explains their freedom to maneuver and pursue their own reserve management agendas, something that full ECB members banks cannot do independently.
Importantly, as non Euro members, the Hungarian National Bank and National Bank of Poland have never been signatories of the Central Bank Gold Agreement (CBGA) syndicate, and thus have the freedom to buy gold when they feel like it, unlike the CBGA signatories which more and more now appear to have signed up to a pact to avoid purchasing any gold as well as avoiding selling any gold.
Whatever the exact motives, both Hungary’s and now Poland’s gold purchases and repatriations are sending clear signals to the EU elites that in the realms of both politics and monetary policy, the two countries still have an independent streak and sense of national sovereignty found lacking in many other EU member nations.
For now, the final word goes Polish central bank president Adam Glapiński who said in the 5 July announcement, that:
“I am proud and moved that during my term – in the year in which we celebrate the centenary of the Polish zloty as the foundation of our country’s economic strength – we managed to increase strategic gold reserves and take actions to repatriate a significant part of Polish gold to the country.
By implementing our constitutional, statutory and simply patriotic commitment, we not only build the economic strength of the Polish state, but also create reserves that will safeguard its financial security. This is the global trend, but also the expectation of Polish society.”
https://www.bullionstar.com/blogs/ronan-...atriation/
With a variety of the world’s central banks going on a gold buying spree in recent years such as Russia and China, there has unsurprisingly been no shortage of newsflow in this area for the world’s financial media to comment on. But even in such an environment of abundant sovereign gold purchases, a number of buying bombshells have stood out for their intensity and ‘shock and awe’ abruptness. Particularly from nations which on the surface might seem like unlikely gold buyers.
One of these was the announcement last October by Hungary’s central bank, that after 32 years of holding unchanged gold reserves, it had rapidly increased its monetary gold holdings by 1000% or 10 fold, from 3.10 tonnes to 31.5 tonnes, and also repatriated (brought home) his entire holding from London to Budapest, away from the clutches of the Bank of England.
At the time we asked: “With almost all of Poland’s gold held at the Bank of England, a relevant question now is how long before Poland also sees fit to repatriate its gold in physical form away from the fractionally-backed LBMA controlled gold trading centre of London. “
The answer to this question was, not long at all.
- The NBP’s management board made a strategic decision to significantly increase the central bank’s gold reserves. This decision was then implemented by the NBP.
- Over 2018-2019 the central bank bought 125.7 tonnes of gold and now has 228.6 tonnes of gold.
- Of the 125.7 tonnes, 100 tonnes were purchased in 2019 and 25.7 tonnes in 2018. Notably, the entire 125.7 tonnes was bought ‘in the last 12 months’.
- The NBP has decided to bring back ‘almost half’ of its gold (which is all stored at the bank of England in London) and store this repatriated gold domestically in the NBP’s vaults.
Poland’s gold holdings as a percentage of total reserves was also, it says, below average.
For example, as of June 2019, when Poland was still reporting 128.6 tonnes of gold held, this represented 4.7% of its reserve assets.
In comparison, the average for all central banks globally is 10.5% according to the NBP, and 20.5% for European countries.
For Euro area countries, gold as a percentage of reserves assets is even higher, at 53.6%, pulled up especially by the large claimed gold holdings of Germany, France and Italy.
Although the official language in the press release is diplomatic, the NBP makes it clear that there is real risk to holding its gold in London, something that was also clear in the repatriation decisions of central banks such as Hungary and Austria, and perhaps crystallized by the Bank of England’s brazen confiscation of Venezuela’s gold in London last year.
Conclusion
As two of the most independently minded countries in the present day European Union, which are both thorns in the side of the European federalists, the physical gold buying and gold repatriations by the Poles and Hungarians are intriguing to say the least. No other EU states have made such huge and dramatic gold purchases for decades. Could the huge gold purchases and repatriations by the Poles and Hungarians be signalling a skirmish in the two countries’ battle with the EU elites? Because don’t forget, the EU is raging at both countries and even plans to put them under economic sanction.
Poland and Hungary also still use their own currencies, the zloty and forint, respectively, and while their central banks are members of the ESCB, neither are part of the Euro and fully answerable to the ECB. Which also explains their freedom to maneuver and pursue their own reserve management agendas, something that full ECB members banks cannot do independently.
Importantly, as non Euro members, the Hungarian National Bank and National Bank of Poland have never been signatories of the Central Bank Gold Agreement (CBGA) syndicate, and thus have the freedom to buy gold when they feel like it, unlike the CBGA signatories which more and more now appear to have signed up to a pact to avoid purchasing any gold as well as avoiding selling any gold.
Whatever the exact motives, both Hungary’s and now Poland’s gold purchases and repatriations are sending clear signals to the EU elites that in the realms of both politics and monetary policy, the two countries still have an independent streak and sense of national sovereignty found lacking in many other EU member nations.
For now, the final word goes Polish central bank president Adam Glapiński who said in the 5 July announcement, that:
“I am proud and moved that during my term – in the year in which we celebrate the centenary of the Polish zloty as the foundation of our country’s economic strength – we managed to increase strategic gold reserves and take actions to repatriate a significant part of Polish gold to the country.
By implementing our constitutional, statutory and simply patriotic commitment, we not only build the economic strength of the Polish state, but also create reserves that will safeguard its financial security. This is the global trend, but also the expectation of Polish society.”
https://www.bullionstar.com/blogs/ronan-...atriation/
![[Image: reserve%20currency%20status_2.jpg?itok=7gd_rKPG]](https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/reserve%20currency%20status_2.jpg?itok=7gd_rKPG)