The Czech Republic, or Czechia for short, is a moderately-sized country in central Europe with a long and complex history. Another former member of the Eastern Bloc, the Czech Republic has seen substantial growth through its social market economy, and it is currently one of the fastest-growing and most stable economies in Europe. Its citizens enjoy fairly comfortable lives with a low unemployment rate. However, large growths in unemployment have hit the country throughout 2019 and 2020. Luckily, its imminent rebound makes it a viable investment opportunity as the value of Czech currency and gold stocks rise in value once again.
The Economy of the Czech Republic
The Czech Republic has seen a massive economic boost since the Eastern Bloc dissolved, and it has developed a booming social market economy based heavily on the exportation of automobiles, information tech, and machinery. This reliance on exporting some of the most in-demand global products has aided its growth significantly. However, it has left the economy slightly at-risk to global trade practices, but the country has a history of quickly adapting and rebounding. So, investors can rest easy knowing that Czech investments are fairly safe.
The country has also integrated a social welfare state that has kept unemployment and poverty low for years. In fact, despite the efforts made to combat the Covid-19 pandemic, Czechia's unemployment rate only reached 4%. That's relatively low for most countries under normal circumstances, and it's quickly returning to its record-breaking lows of the past.
The Currency of the Czech Republic
The current currency of the Czech Republic is the Czech Koruna or CZK for short. The Koruna is similar to many other European fiat currencies as it isn't backed by the gold standard, is divisible by 100 smaller units, and is pegged to the Euro.
The Koruna is fairly strong and safe to invest in due to Czechia's economy and national wealth, but there is one caveat. As a new member of the European Union, Czech Republic is obligated to change its national currency to the Euro. This isn't likely to happen in the short term due to the legislative process and social changes that go into changing a country's currency, but it will eventually happen.
Fortunately, CZK is safe to hold wealth in, and it can be used to buy and trade gold internationally.
Gold Mining in the Czech Republic
Although the Czech Republic has significant deposits of gold, most are in regions of the country that are environmentally protected, and cannot be mined. For this reason, there has been no gold mining in the Czech Republic since 1992.
Buying Gold in CZK
Buying gold is popular in the Czech Republic right now. Not only is it a good investment due to its industrial demand in the country, and the government's desire to stockpile more gold each year to strengthen the economy further, but it's a great way to hold wealth considering the European Union's eventual effects on the Koruna. The Czech government currently holds just under 10 tonnes of gold bullion in its reserves. Reserves have increased slightly since the onset of the Coronavirus crisis, however, they are far off from their high of 13.5 tonnes.
Buying gold with CZK is easy within the EU, as a number of bullion dealers sell gold bars and coins for delivery to the Czech Republic, and they accept CZK as a payment currency. Buying gold bars and coins in smaller sizes, incrementally and over time is popular in the country.