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The World’s Biggest Buyers of Gold Are Now Among East European Central Banks

In an effort to reduce volatility, to diversify their bank reserves, to hedge against fiat currencies, and to assume their independence Central Banks in Eastern European Countries are among the world’s biggest buyers of Gold which helps drive the sustainable gold rally.

The Czech National Bank stated its ambition to double its stockpile to 100 metric tons in the next three years. This is a fivefold increase since the new governor took office in 2022. The Czech Central Bankers aren’t the only ones pursuing the same goal. According to our research, peers in Warshaw, Belgrade, Budapest, Bratislava, and Belgrade are aiming at the same.

Historically, the major Central Banks (FED, BOJ, BOE, ECB, SNB) were buying gold to help manage the value of their foreign currency reserves and as a shield against external geopolitical shocks, wars, and rampant inflation. More recently, important buyers included emerging economies such as India, Turkey, Russia, China, and Egypt. These Central Banks have different reasons to enter the market. In the case of Turkey, Russia, and Egypt, Central Banks are stockpiling gold to limit the rapid currency depreciation. While India, holding some 850MT of gold as Q3/2024, has been a regular buyer of Gold, China is new to the club of gigantic gold buyers as the CCP, via PBOC, is looking to “de-dollarize”.

Still, Central European Banks have a different deal. EU member countries Poland, which increased bullion holdings to 420MT as of September 2024, and Hungary, holding some 110MT, have been making regular additions to their holdings while at the same time unloading Russian Rubles they did hold historically. Hungary has tripled its total gold holdings to around 95MT, arguing that it needs a new tool to manage “new risk arising from the coronavirus pandemic”, aka to mitigate the risk of the global spike of local and government debts. Serbia’s Central Bank intends to triple its gold reserves to 50MT as quickly as possible.

A positive outlook for 2025

With the geopolitical winds still going strong and with the Trump administration 2.0 agitating new 

trade wars here and there, gold purchases are a good bet for monetary policymakers. Goldman Sachs listed XAU as one of the top commodities for 2025, saying prices could surprise to the upside during Trump’s presidency and reach $3,000 an ounce by December next year. A similar analysis was published by Bank J. Safra Sarasin which reported “Geopolitical fragmentation is favorable for gold, while gradual dollar weakening should be a further tailwind”.