Interest in gold shoots up in Czech Republic
Interest in gold has skyrocketed in the Czech Republic this year, the business daily Hospodářské noviny reported on Tuesday, saying this reflected a worldwide trend.
The volume of investments in the precious metal has risen by around 50 percent this year and could have been even higher but for the fact demand in Europe is outstripping foundries’ ability to keep up, Roman Pilíšek of the company Zlaté rezervy told the newspaper.
The head of the firm Golden Gate CZ, Libor Brůna, said that demand in the first two months of the year had been very similar to that seen in 2021.
However, in March and April interest in physical precious metals increased by no less than 50 to 100 percent, Mr. Brůna told Hospodářské noviny.
Golden Gate CZ achieved sales of CZK 2.4 billion in the first four months of this year, around 713 million more than in the same period last year, the firm said.
The catalyst for the increased interest in gold was events linked to what is happening in Ukraine, Mr. Pilíšek told the daily. Investors are also responding to higher inflation, he said.
Hospodářské noviny said nervousness on the financial markets could also be a factor. Investors and savers are shifting their available monies to the safe haven of precious metals, Mr. Brůna said.
Gold and other metals traditionally thrive when there is increased uncertainty. Historically they are seen as a safeguard against inflation and a repository of value in times of war and famine, Trinity Bank chief economist Lukáš Kovanda told the newspaper.
However at the present time buying gold may not actually pay off so much. Boris Tomčiak, an analyst with the company Finlord, said that it was already too late as the worst inflation growth was already behind us; gold typically does best in the first phase of inflation growth, he said.
Gold prices have gone up by around 8 percent in the last 12 months. This is some way behind the current level of inflation, which reached 14.2 percent in the Czech Republic in April.
Czech investors in gold can, however, thank the weakening of the Czech crown to the US dollar for helping their investment appreciate, Hospodářské noviny said.