Fed tests gold upleg
Gold’s outlook and fundamentals remain really bullish.
The Czech Republic expanded its gold reserves in June as central bank Governor Ales Michl continues to execute a plan to diversify investments to make his institution profitable.
Czech holdings of the precious metal increased to 41.5 metric tons, from 39.7 tons in the previous month, central bank data showed on Tuesday. The value of gold totaling $3.1 billion at the end of June still represented only a fraction of the overall reserves of $146.5 billion, which are one of the highest in the world relative to the size of the economy.
Michl, who started his six-year tenure in July 2022, has set a goal to boost the bank’s gold holdings to 100 metric tons, which would be roughly a 10-fold increase from the amount it held two years ago.
Ramping up gold reserves and boosting investment in shares are part of Michl’s goal that he hopes may help his successor achieve profitability. The change in balance sheet management should increase the expected average annual return on the reserves to about 4% from an earlier long-term average of about 2.6%, Michl said in an interview in June.
Gold has become increasingly popular in central and eastern Europe, with countries seeking to diversify reserves and some even considering the precious metal as a way to protect their economies from geopolitical turmoil.
Serbia’s central bank bought 5 tons of gold last week, bringing its total holdings to 46.5 tons, in a move that President Aleksandar Vucic described as enhancing the Balkan nation’s “financial security.”
“We want to be safe and secure in hard times, which I expect as the president of the republic,” Vucic said late on Monday.
(By Michal Kubala)
Comments