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Gold Price Tops $2040 as Poland's Politics Turn on World No.2 Gold-Buying Central Bank

The GOLD PRICE rose Thursday, briefly topping the $2040 mark as global stock markets fell with longer-term interest rates and the new Prime Minister of Poland – the world's No.2 official-sector gold buyer in 2023 – was rebuked by its President for seeking to replace the country's central bank chief.
Second only to China's central bank in reporting heavy gold purchases this year, the National Bank of Poland (NBP) is on course to have added more than 130 tonnes to its bullion reserves across 2023, raising its total holdings around 50% by weight.
Rising towards 360 tonnes in total, Poland's central-bank gold holdings have almost tripled since current governor Adam Glapiński – an ally of the right-wing Law and Justice Party (PiS), which lost power in October's parliamentary elections to a centrist coalition headed by former Prime Minister and ex-president of the European Council Donald Tusk – took office in mid-2016.
Chart of gold reserves held by this year's top 3 buyers. Source: World Gold Council
"I do not agree with all those who criticise the Monetary Policy Council and the governor of the National Bank of Poland," said Poland's President Andrzej Duda in a radio interview on Thursday, also rebuking Tusk for shutting down state-owned media which the new Prime Minister claims became too politicized under the PIS.
Tusk this week dismissed Poland's representative to the World Bank, PiS-appointee Jacek Kurski – a move condemned as unlawful by the NBP in a press release – and repeated his plan to remove Glapiński as central bank governor but rowed back from wanting to prosecute him for "unlawful" quantitative easing during the Covid pandemic and for cutting interest rates amid a controversy over the true pace of inflation ahead of the 2023 election.
"While Glapiński should be at the vanguard of those who protect the political neutrality of the NBP," said Tusk yesterday, "we note that he has failed this test."
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The neighboring Eurozone's chief central banker Christine Lagarde earlier this month wrote to Glapiński agreeing that EU member-state policymakers can expect to be protected against political interference affecting their independence.
"All the measures we will take," countered Tusk, "including concerning Glapiński, are aimed at rebuilding the full political independence of the central bank."
Gold priced in the Zloty edged higher on Thursday, but held almost 15% below the record set in early 2022, when the gold price spiked on Russia's all-out invasion of Poland's neighbor Ukraine.
Euro gold prices meantime traded in the middle of this week's €15 per ounce range at €1857, while the UK gold price in Pounds per ounce rose close to 2-week highs above £1612 after weaker-than-expected inflation saw betting jump that the Bank of England will start to cut Sterling interest rates sooner than later.
With central banks as a group, led by China, more than offsetting a slowdown in private-sector gold investment this year on estimates from consultancy Metals Focus for the mining industry's World Gold Council, Poland's purchases have accounted for more than 1/10th of the estimated 1,100-tonne addition to official-sector holdings.
" Gold reserves matter to perceptions of the state and its economic strength," said Glapiński back in 2021 after announcing his plans for the NBP to begin a steady program of gold bullion purchases.
That October he was recognized as "the captain of the flagship of Polish economic life" by finance magazine Gazeta Bankowa, awarding him a 'Polski Kompas' statuette for taking "uncompromising, considered and effective decisions during the Covid crisis" and for the policy of buying gold, "whose holdings continue to grow in the NBP's vault."


Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

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