Gold Price Zips Higher as Eastern European Countries Urgently Load Up on Bullion
Gold catches a tailwind amid news that Serbia has loaded up on its precious metals reserves. | Image: shutterstock.com
- Gold rallies to an intraday high of $1,475.50/oz.
- Precious metals trade at more than one-week highs as risk appetite wanes.
- Serbia bought nine tons of gold in October to hedge against crisis.
The price of gold extended its rally on Thursday, as waning risk appetite drove investors into the relative safety of precious metals.
In October, Serbia became the latest country to load up on bullion after the central bank heeded to the advice of President Aleksander Vucic.
Gold Price Rises; Silver Follows
December gold futures, the most actively traded futures contract, rose 0.8% to $1,475.50 a troy ounce on the Comex division of the New York Mercantile Exchange. The yellow metal is trading at more than one-week highs, partially offsetting a steep drop through Nov. 12.
Silver futures traded in the same direction as gold, climbing 0.5% to $17.00 a troy ounce.
Gold’s premium over silver rose 0.2% to 86.33.
Serbia Buys Nine Tons of Bullion
Heeding to the advice of its president, Serbia’s central bank added nine tons of gold to its reserves in October – a move designed to safeguard against financial instability.
The central bank paid $434.3 million for the gold, which works out to around $1,503 an ounce, according to Bloomberg .
Central Bank Governor Jorgovanka Tabakovic told reporters on Thursday that her country is “safer today” with 30.4 tons of gold in its coffers. At current prices, that’s equivalent to $1.4 billion.
Serbia is just one of several Eastern European countries to increase its bullion reserves. Hungary, Poland and Russia have all boosted their holdings in recent years to protect against macroeconomic risks and diversify their foreign exchange reserves. According to Euro Pacific Capital CEO Peter Schiff, this is the only way nation states can protect against the impeding U.S. dollar crisis.
As of July, Russia’s gold reserves totaled 2,217.58 ounces .
The U.S. dollar has been rallying since June against a basket of competitor currencies that are facing their own systemic devaluation risks. The euro, pound and yen are all staring down grim economic prospects and looser monetary policy.
The U.S. dollar index was down 0.2% to 98.18 on Thursday. The dollar index has rebounded 2.3% from its June low.
