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Gold purchases earn Polish Central Bank over $1 billion profit

Tue Feb 25 2020

 

National Bank of Poland (NBP) has earned over $1 billion in unrealized profit from purchasing large amounts of gold in 2018 and 2019 after the last few months witnessed a dramatic rise in gold prices.

 

The price per ounce has exceeded $1,600, and though this is still short of the $1,900 record of 2011, the trend has been upward.

 

The rise in the price of gold has been caused by uncertainty on the market over the US-China trade conflict and the dramatic spread of coronavirus, which is showing signs of significantly impairing global trade.

 

This is why the NBP gold purchases in 2018 and 2019, when its price was considerably lower, have been hailed as forward-thinking by financial authorities. The purchases also contributed greatly to bolstering Poland’s gold reserves from 126 to 229 tons.

 

The NBP has over the past two years purchased 126 tons of gold for a sum of $5 billion. At today’s prices, that gold is now worth over $6 billion.

 

The 229 tons now in stock in Poland brings the NBP into line with the average gold reserves for central banks in the world.

 

Since the NBP does not want to sell this gold, the gain in price does not represent actual profit, but it does strengthen the position of the NBP and Poland’s financial standing in general, representing a clear success for Poland’s central bank.

 

The good financial news coincides at the same time that Poland is celebrating the 100-year anniversary of its currency. It also follows shortly after Poland transported its 100 tons of gold reserves from Britain to Poland in a secret operation.

 

The gold also makes Poland more financially secure and in line with both world trends and expectations in terms of national gold ownership.

 

Thanks to these purchases, Poland is now 21st in the world in terms of gold reserves, with double the amount of Sweden and not far behind Spain and Austria.

 

As a result of the stronger position of the central bank, it is able to contribute nearly half a billion dollars more to the state budget, with the country feeding 95 percent of its profit into the state budget.

 

Source: https://rmx.news/