Gold is all that nationalist leaders in Eastern Europe can talk about these days.
Just this week, the Polish government touted its economic might after completing the repatriation of 100 tonnes of the metal.
In Hungary, anti-immigrant Hungarian Prime Minister Viktor Orban has been ramping up holdings of the safe-haven asset to boost the security of the nation’s reserves.
Spot gold on Friday settled at US$1,461.47 an ounce, down 0.2 percent for the week.
The gold rush mirrors steps by Russia and China to diversify reserves exceeding US$3 trillion away from the US dollar amid flaring geopolitical tensions with the US.
However, motivations in Europe’s ex-communist wing can vary.
Take the latest example. Former Slovak prime minister Robert Fico, who has a shot at returning to power, has urged parliament to compel the central bank into bringing home gold stocks stored in the UK.
The reason? Sometimes your international partners can betray you, Fico said, citing a 1938 pact by France, the UK, Italy and Germany allowing Adolf Hitler to annex a chunk of what was then Czechoslovakia, and — more recently — the Bank of England’s refusal to return Venezuela’s gold stock over political differences.
“You can hardly trust even the closest allies after the Munich Agreement,” Fico told reporters. “I guarantee that if something happens, we won’t see a single gram of this gold. Let’s do it as quickly as possible.”
His comments came despite the UK being one of Slovakia’s closest allies after the Soviet Union crumbled, helping ease the path to EU and NATO.
Fico said Brexit and the risk of a global economic crisis put Slovak gold stored in the UK in a dangerous situation.
The gold Poland brought back also came from the UK, although there was no questioning of the UK’s reliability by Polish central bank Governor Adam Glapinski.
Instead, he said he wanted to demonstrate the strength of his nation’s US$586 billion economy — the largest in the EU’s east.
Poland has doubled its gold holdings in the past two years and has the region’s biggest stockpile.
Hungary has been an active buyer too. Gold reserves last year surged 10-fold, setting the clamor for the metal in the countries around it in motion.
Serbian President Aleksandar Vucic took note, ordering the central bank to boost reserves and prompting the purchase of 9 tonnes in October.
Vucic last week said that more should be bought, because “we see in which direction the crisis in the world is moving.”
The biggest nation to emerge from the breakup of Yugoslavia still keeps some of its gold abroad, the central bank said by e-mail.
The region is buying more of the metal because of global uncertainty over trade and politics, Brexit and low interest rates, it said.
Romania had also sought to relocate some of its gold reserves from the UK, but those plans were put on hold when the government behind them was ousted in October.
For the no-nonsense leaders that have come to dominate eastern Europe, the main benefit might be the message to voters that hefty holdings of the precious metal conveys.
“Gold is a symbol,” said Vuk Vukovic, a political economist in Zagreb. “When states purchase it, people everywhere see it as a sign of economic sovereignty.”
‧Iron ore futures fell 0.8 percent to US$83.55 per tonne.
‧Copper futures fell 1.1 percent to US$2.67 a pound.
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