Poland Brings Gold Home; Calls It a Symbol of Strength
Not comfortable holding its growing reserves in London
Poland has repatriated 100 tons of gold from England. National Bank of Poland Governor Adam Glapiński announced the yellow metal’s return home on Monday.
“The gold symbolizes the strength of the country,” Glapiński told reporters.
He noted that the country could generate multi-million dollar profits if it sold its gold reserves, although there are no plans to do so.
Glapiński said the Polish central bank will continue to bring its precious metal home if the “reserve situation is favorable.”
Poland has also been aggressively increasing its gold reserves. The National Bank of Poland added 100 tons of the yellow metal to its hoard through the first half of 2019. In a statement announcing the plans earlier this year, Glapiński said he was “proud” of the moves.
We managed to increase the strategic reserves of gold and take steps to repatriate a large 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.”
Poland began accumulating gold last year when it added 7 tons of the yellow metal to its reserves in June and another 3 tons in August. At the time, it was the largest gold purchase by Poland since 1998, and it was the first EU country to add a significant amount of gold to its reserves since 1983. It bought another 15.7 tons through the final months of 2018 and 100 tons through the first half of this year. That brought the country’s total reserves to 228.6 tons, according to the NBP statement.
Gold is the ‘most reserve’ of reserve assets: it diversifies the geopolitical risk and is a kind of anchor of trust, especially in times of tension and crises.”
Poland now ranks as the 22nd-biggest holder of bullion in the world.
Poland joins a number of other Eastern European nations in buying gold. Serbia added 9 tons of gold to its reserves in October, and late last year, the Hungarian central bank announced it boosted its gold reserves 10-fold.
A number of countries have also repatriated some or all of their gold reserves over the last several years, most recently Hungary and Romania. In the summer of 2017, Germany completed a project to bring half of its gold reserves back inside its borders. The country moved some $31 billion worth of the yellow metal back to Germany from vaults in England, France and the US. In 2015, Australia launched efforts to bring half of its reserves home. The Netherlands and Belgium also launched repatriation programs. Even the state of Texas has put a plan in place to bring its gold within state borders.
Gold repatriation underscores the importance of holding physical gold where you can easily access it. Gold-backed exchange-traded funds (ETFs) and “paper gold” have their place. But true security and stability come from physical possession of precious metals. If you can’t hold it in your hand, you don’t really possess it. That’s exactly why these countries are bringing their gold home, safe within their own vaults.
A report by Bullion Star noted that “Although the official language in the press release is diplomatic, the NBP makes it clear that there is a real risk to holding its gold in London.” According to the report, England’s “brazen” confiscation of Venezuela’s gold may have increased unease about holding gold abroad.