The beginning of the year was a historic moment for Croatia, as the nation became part of the Eurozone and adopted the Euro as its national currency. Against this backdrop, it became clear that gold remains a key asset for central banks.
Last month, Krishan Gopaul, market analyst for Europe, the Middle East and Asia at the World Gold Council, reported that Croatia bought nearly 2 tons of gold in December. It was the first gold purchase by the Central Bank since 2001, it noted Kitco.
According to Croatian public news agency HRT, the gold purchases are linked to the nation’s entry into the eurozone. Croatia had to transfer part of its foreign reserves to the European Central Bank (ECB).
In an interview with HRT, the governor of the Croatian National Bank, Boris Vujicic, that the institution transferred 639.9 million euros to the ECB at the beginning of January.
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The gold purchased, approximately 56,256 ounces and worth more than $101 million, represents 15% of the payment to the ECB. The remaining 85% of the payment is in US dollars, valued at $580.1 million. The central bank said it bought the gold on the open market for just over $1,800 an ounce.
According to HRT, Croatia’s gold reserves have been the subject of heated debate over the years. In 2015, it was revealed that the nation’s gold was sold in 2001 for about $272 per ounce. Croatia had 13.2 tons of gold after it broke away from Yugoslavia in the early 1990s.
Croatia joined the European Union in 2013 and took nearly ten years to become a member of the Eurozone. Countries must meet specific economic criteria to become members of the euro area, including sound public finances, sustained price stability and a stable currency.
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Although Croatia bought gold for the first time in more than 20 years, it was certainly not the only one. Last month, the World Gold Council noted that central banks bought 417 tonnes of gold in the fourth quarter of last year.
Central banks bought 1,136 tonnes of gold last year, the most since 1967 and the second largest amount since 1955.
