The world’s biggest sovereign gold buyer might start selling to double defense budget
Poland has been the biggest buyer among the world’s central banks for the last two years, and a major support for the gold rally that has taken place over that time. Now, facing year four of the intractable conflict between Russia and Ukraine on its Eastern border and a NATO alliance in flux, the Eastern European nation is considering the unthinkable: selling its gold reserve to fund a massive military buildup.
Adam Glapinski, Governor of Poland’s central bank, has outlined a proposal to raise as much as $13 billion from the sale of the country’s gold reserves to finance a doubling of its defense budget, according to a report from Bloomberg citing insiders familiar with the matter, as part of a plan backed by the nation’s president.
Glapinski outlined the proposal in a meeting with President Karol Nawrocki on Wednesday, with the President saying he wants to find an alternative to a European Union funding program that the United States opposes. Nawrocki and other members of his government have expressed concerns about the EU’s $174 billion loans-for-weapons program as a costly endeavor that would jeopardize ties with Washington.
According to the sources, Glapinski told Nawrocki that the National Bank of Poland could generate some profit by selling some of its roughly 550 tons of gold reserves, which it could then buy back. Another $3.25 billion could come from other revenue streams through the central bank, providing as much as $16 billion in additional defense financing this year alone.
Eventually, the total value of the plan would rise to around $50 billion, roughly equivalent to SAFE loans that Europe proposes to allocate to Warsaw, according to the Polish president.
The sources told Bloomberg that another option would be to modify the law to allow the central bank to revalue gold reserves to realize the profits on their appreciation, while simultaneously drafting legislation requiring that it be allocated to defense spending.
Glapinski spoke to reporters on Thursday, confirming that he’s working on a gold reserve-based plan, but he didn’t reveal any specifics.
Any sale of the reserves would be a major change of direction for the country. Poland’s central bank has been the world’s biggest official buyer of gold in recent years, adding over 100 tons to its reserves in both 2024 and 2025.
In September of last year, Glapinski said Poland’s central bank intended to increase its gold holdings to 30% of total reserve assets in an effort to bolster the country’s financial security.
“In these difficult times of global turmoil and the search for a new financial order, gold is the only safe investment for state reserves,” NBP Governor Adam Glapinski said in a statement at the time, adding that the scale and pace of purchases would depend on market conditions.
