ZAGREB, 7 April (Hina) - Croatian citizens purchased investment gold worth around €350 million last year, and this year that amount could exceed €500 million, according to estimates presented at the 3rd International Crogold Conference.
These figures refer to gold that citizens physically possess, mostly in the form of bars and gold coins, says Saša Ivanović, director of Centar Zlata, a company purchasing and selling investment gold.
According to him, despite the increase in gold sales in Croatia, investment levels have still not reached those seen in the rest of the EU and other developed countries. He says this is partly because gold only became profitable as an investment after Croatia joined the EU when it was exempted from VAT and luxury tax.
In the first quarter of this year, turnover grew by 70%, whereas globally, it increased by 50%.
“Croatia always grows a little more because it's a fairly young market, and people are only just getting used to buying investment gold and saving in it,” says Ivanović.
Record gold price
He notes that Croatian citizens generally consider gold purchases a long-term investment, primarily aiming to preserve the value of their money, with profit being a lesser motivation. One of gold’s advantages is that it can be sold on the same day and converted into cash.
At the time of last year’s conference, the price of an ounce of gold was around US$ 2,350, when many claimed it had reached its historical maximum, Ivanović says. However, its current price is also at a record high, exceeding $3,100 per ounce. Ivanović believes “the end of the price increase is still far off.” He cites estimates suggesting that the price of an ounce of gold could reach $7,000 by 2030.
He also provided a comparison between citizens’ investments in gold and government securities. If €6 billion had been invested in gold, investors would have earned around €2 billion, whereas in the case of people’s bonds and treasury bills, the earnings would amount to around €200 million.
Demand for gold rises in times of uncertainty
Professor Marijana Ivanov from the Zagreb Faculty of Economics says demand for gold always rises in times of uncertainty, insecurity and high inflation.
Stock prices are highly volatile and react to current events such as tariffs, trade wars, geopolitical conflicts, protectionism and sanctions, leading some investors to flee from such investments, with gold always being an alternative.
“Whenever there is either a factor of real loss of money’s value or a flight from other asset categories due to a potential significant drop in their price, demand for gold increases,” she says.
The Croatian Mint is a company owned by the Croatian National Bank (HNB). Its primary function is the production of euro coins with Croatian motifs, but it also generates significant revenue from commemorative coins, which have nominal value and fall into the category of investment gold.
The HNB is the issuer, while the rest of the work, from initiative, preparation, minting and sales to distribution of gold coins, is handled by the Croatian Mint, says its sales manager, Ivan Odrljin.
Around 70% of commemorative gold and silver coins are sold on the domestic market, but in the past year or two, sales on foreign markets have also increased, now accounting for nearly 30%, he says.
