Eastern Europe Gold Could Be New Fundamental Driver of Global Demand

Eastern Europe's strengthening interest in gold and the efforts of its central banks to build reserves may be overshadowing China’s influence on gold demand. Ultimately, the growing gold emphasis by several of these countries seems to be helping sustain the long precious metals bull market of the past few years. Individual investors, including those who hold or are considering gold IRAs are eyeing this development to help them protect their savings.

Before the presidential election (won by Donald Trump), gold had reached a pinnacle price of upwards of $2,800 per ounce.[1] After the election, gold’s price dropped due to a rise in the strength of the U.S. dollar, which can irritate gold’s position.[2]

By early December 2024, the price of gold had recovered to 5% lower than its preelection price[3], and the changes had prompted observers to reexamine the future of gold.

Some suggested that the three-year gold bull may have been coming to an end.[4] However, others said the election and generally favorable economic outlook that came from President Trump’s victory were not enough to end the bull run. Their reasons have to do with fundamentals still in place that sustain a broadly gold-favorable environment.

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Drivers of Gold Remain Intact

After the election, analysts said once everything leveled out, Trump’s America First economic and foreign policies could provide more support for gold going forward.[5]

One of the drivers of gold expected to remain in play was the record quantities of gold buying by central banks.[6][7] (See details in full article, which you can access at the link near the top of this article.)

In fact, Goldman Sachs estimated that gold could go as high as $3,150 per ounce, largely based on central banks’ efforts to stay solvent and resist any sanctions like those Russia suffered in 2022. [8][9]

In addition, China and the BRICS nations are not likely to suddenly end efforts to get around using the U.S. dollar for global transactions.[10]

China has long been the world’s leading central-bank consumer of gold, but that may be changing. A report by Bloomberg indicated that Eastern European central banks may be leading gold acquisitions. This includes banks in the Czech Republic, Poland, Hungary, and Serbia.

Why Eastern European Central Banks Are Buying Up More Gold

The bump in Eastern European gold buying is a response to those countries’ efforts to assert economic independence and insulate themselves from geopolitical stress in the region since Russia declared war on Ukraine. The countries see gold as one of the ways to do that.[11]

Bloomberg explained, “Striving for a sense of security is a powerful motive in a region that’s been ravaged by Europe’s wars of the past — and that now finds itself next door to the continent’s deadliest conflict since World War II.[12]

The Czech Republic central bank governor Ales Michl said the country wants to double the size of its gold holdings over the next three years .[1] It had already increased gold reserves by 400% in the two years before the 2024 U.S. presidential election.[13]

Michl said to Bloomberg TV, “We need to reduce volatility. And for that, we need an asset with zero correlation to stocks, and that asset is gold.”[14]

Poland said it wants to raise gold to as much a 20% of it’s total reserves. Adam Glapinski, Poland’s central bank governor, explained:

Gold symbolizes the strength of the country.[15] This matters, among other things, for how the country is perceived.[16] We are solvent, trusted, and will remain so, even in the most challenging political, military, or other conditions.[17] We are entering the exclusive club of the world’s biggest gold owners.[18]

In 2024, Hungary could claim the highest gold holdings per capita of any nation in Central and Eastern Europe.[19] The Hungary central bank released a statement with a sense of pride saying gold enhances confidence in the country and supports its financial stability.[20]

In Serbia, President Aleksandar Vucic began working in 2021 to repatriate the country’s gold holdings.[21] From 2012 to late 2024, Serbia’s central bank governor Jorgovanka Tabakovic tripled gold reserves to 48 tons.[22]

All of these efforts support projections that gold-buying will remain strong for the foreseeable future. (Read more analysis in the full article.) 

Adding to the thought that gold will continue to thrive is the 2024 Central Bank Gold Reserves Survey, which reported that most central banks believe the dollar will decline and gold reserves will climb over the next half-decade.[23]

It’s not surprising when you consider that the dollar’s share of global reserves slipped steadily since the start of the millennium — from roughly 72% in 2002 to around 58% in late 2024.[24]  

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Gold IRA Investors Watch Gold Demand

Among the most common investors in gold are those who have saved for decades to support themselves in retirement. Many American investors choose to add physical gold to their retirement holdings in the form of a gold IRA. 

Investors need to work with their own tax, financial, and legal professionals to determine whether gold is right for their circumstances. However, the recent enthusiasm of Eastern European central banks for gold may lead some individual investors to feel optimistic about the future of gold as well. 

There’s no way to be sure what will happen with the price and position of gold globally or the likelihood that a gold IRA will do well as a result of President Trump’s policies during his second stint in the White House. However, the stated intention of central banks to bolster Eastern European gold is one of the main reasons some analysts are saying they don’t expect the price of gold to decline as much as others say it will.

[1] CNBC.com, “Gold COMEX (Feb′25)” (accessed 12/5/24). 

[2] Myra Saefong, MarketWatch, “Why gold prices are now dropping on the heels of Trump’s win” (November 11, 2024, accessed 12/5/24). 

[3] CNBC.com, “Gold COMEX (Feb′25).” 

[4] Times of India, “Is the gold bull run nearing its end? Why you shouldn’t go overboard in buying gold for investment” (November 5, 2024, accessed 12/5/24).  

[5] Saefong, “Why gold prices are now dropping.” 

[6] Jennifer Sor, Business Insider, “Gold could jump 11% next year as central banks ramp up their buying spree, Goldman Sachs economist says” (November 22, 2024, accessed 12/5/24). 

[7] World Gold Council, “2024 Central Bank Gold Reserves Survey” (June 18, 2024, accessed 12/5/24). 

[8] Elena Fabrichnaya and Guy Faulconbridge, Reuters.com, “What and where are Russia’s $300 billion in reserves frozen in the West?” (December 28, 2023, accessed 12/5/24). 

[9] Christiaan Hetzner, Yahoo Finance, “Donald Trump’s presidency could light a speculative fire under gold, pushing the price to a fresh all-time high” (November 19, 2024, accessed 12/5/24). 

[10] Joseph Moss, International Banker, “What’s Behind China’s Gold-Buying Spree?” (August 14, 2024, accessed 12/5/24). 

[11] Vanessa Gera, AP News, “Poles seek safety in gold investments during troubled times across their eastern borders” (June 27, 2024, accessed 12/5/24). 

[12] World Gold Council, “2024 Central Bank Gold Reserves Survey.” 

[13] Peter Laca, Agnieszka Barteczko and Misha Savic, Bloomberg.com, “The World’s Biggest Buyers of Gold Are Now Among East European Central Banks” (November 28, 2024, accessed 12/5/24). 

[14] Ibid. 

[15] Republic of Mining, “Gold ‘symbolizes strength’: Poland repatriates 100 tons from London” (November 25, 2019, accessed 12/5/24). 

[16] Piotr Skolimowski, NDTV, “Gold Fan Glapinski Sees Poland Buying More in Pitch for New Term” (March 15, 2021, accessed 12/5/24). 

[17] Polskie Radio, “Polish central bank increases gold reserves” (February 9, 2024, accessed 12/5/24). 

[18] Laca, Barteczko and Savic, “The World’s Biggest Buyers of Gold.”  

[19] Frank Holmes, U.S. Global Investors, “The Top 10 Nations Buying Gold: A Portfolio Strategy You Can Follow” (October 14, 2024, accessed 12/5/24). 

[20] World Gold Council, “Gold Demand Trends Q3 2024.” 

[21] Laca, Barteczko and Savic, “The World’s Biggest Buyers of Gold.” 

[22] Ibid. 

[23] World Gold Council, “2024 Central Bank Gold Reserves Survey.” 

[24] Atlas 21, “Global reserves of the US dollar drop to 58%: BRICS lead the de-dollarization” (August 16, 2024, accessed 12/5/24).