Poland has joined an elite club.
The country has increased its gold reserves to over 400 tons.
According to National Bank of Poland Governor Adam Glapiński, the county holds 420 tons of gold “on behalf of all Poles.”
Glapiński noted that Poland “has thus entered the exclusive club of the world's largest gold reserve holders.”
Only 10 countries hold more gold than Poland. As Glapiński noted, Poland holds more gold than Great Britain.
The central bank governor has set a goal of increasing the country’s gold holdings to 20 percent of its total reserves.
"Once we achieve this, we will join the ranks of the world's top economies."
Poland was the biggest central bank gold buyer in the second quarter. In the last five months, the Polish central bank has accumulated an additional 39 tons of gold. It now holds about 15 percent of its reserves in the yellow metal.
The Polish central bank began aggressively increasing its gold reserve in 2021 when Glapiński announced a plan to buy 100 tons of the yellow metal. The National Bank of Poland reached that goal last fall and continued its buying spree.
When he announced the initial plan to expand its gold reserves, Glapiński said holding gold was a matter of financial security and stability.
"Gold will retain its value even when someone cuts off the power to the global financial system, destroying traditional assets based on electronic accounting records. Of course, we do not assume that this will happen. But as the saying goes – forewarned is always insured.
“And the central bank is required to be prepared for even the most unfavorable circumstances. That is why we see a special place for gold in our foreign exchange management process."
Glapiński also pointed out that “Gold is free from credit risk and cannot be devalued by any country’s economic policy. Besides, it is extremely durable, virtually indestructible.”
Poland’s affinity for gold comes as no surprise, given its history. The county serves as a crossroads between Eastern and Western Europe, and it has seen more than its fair share of war and strife. Memories of German occupation during World War II and Russian domination in the years that followed linger in the Polish psyche.
Mint of Poland head of precious metals trade Marta Bassani-Prusik said gold sales skyrocketed during the pandemic, and the war next door in Ukraine juiced gold sales again “because everybody was afraid of what was happening.”
Many families remember stories about gold coins and jewelry, meaning the difference between life and death during World War II. It bought food and sometimes an escape.
Bassani-Prusik said stories from WWII and the communist occupation make a big impression on many of her clients.
“They say that they are alive only because of the gold because their grandparents had a gold bar or a gold coin.”
Poland also repatriated 100 tons of gold back in 2019, bringing it home from the Bank of England.
Glapiński said there are “a dozen or so places in Poland … where our reserves are safe.”
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