Romania and Gold: a 6000 years relation

Romania Dacia

Besides the large holders of official gold reserves like United States, European Union, China and Russia there are some small countries that are very interesting to look at as it concerns gold. They are three different but all interesting countries: Switzerland, Romania and Lebanon. In this article I will look at Romania.

While working on an article on Canada’s official gold reserves I just realised how important gold is to another country I know well Romania. Canada just sold all its official gold reserves this year, a process started in the 80s. Being Romanian I studied Romania’s history at school and I knew about its close and strong relation to gold but didn’t realise how important it still is today. During my recent trips since the collapse of communism in 1989 I was surprised when a Greek bank, that just opened branches in Romania, was advertising and selling gold to the public. More recently during another trip I was surprised again to see an advertisement on the counter of the foreign exchange desk of another Romanian bank for gold bars and coins. Romania’s government and central bank don’t encourage citizens to buy gold but they don’t obstruct it nor does the central bank increase its gold reserves however, contrary to Canada it refuses to sell its large official gold reserves.

Coson Dacian Coin

A Coson Dacian coin representing Geto-Dacian king Coson (mid-first century BC)

The Dacians (today Romanians) lived in a very large territory, stretching from the Balkans to the northern Carpathians and from the Black Sea and the Tyras River (Nistru) to the Tisa plain, and at times as far as the Middle Danube. The history of gold and Romania goes maybe more than 6000 years. Around 1200 BC, the Egyptians used unshorn sheepskin to mine for gold dust from the sands of the Black Sea.

Europe Map

There is archaeological and metallurgical evidence of gold mining in the ‘Golden Quadrilateral’ of Transylvania (province of Romania) since the late Stone Age. The rich mineral resources of the area have been exploited since Roman times or before. Alburnus Maior was founded by the Romans during the rule of emperor Trajan as a mining town, with Illyrian colonists from South Dalmatia. The earliest reference to the town is on a wax tablet dated 6 February 131. Archaeologists have discovered in the town ancient dwellings, necropolises, mine galleries, mining tools, 25 wax tablets and many inscriptions in Greek and Latin, centred around Carpeni Hill. The Romans concurred Dacia in 106 and left it in 271. In Roșia Montană area, Romanian province of Transilvania, is the largest gold deposit even today after thousands of years of mining in continental Europe and is estimated at over 300 tonnes of gold and 1,600 tonnes of silver.

Rosia Montana Mine

Roșia Montană Gold Mine (province of Transilvania, Romania)

Roman Gold Mine

Roman gold mine gallery in Orlea Massif (Romania). Photo by Lorin Niculae

Evidence suggests that it was between 4600 and 4200 BC, when gold smithing first started in Varna Necropolis in neighboring Thracia (now Bulgaria). The Varna Necropolis archeological site was found to contain remarkably rich burials. Over 1.5 kg of gold in the form of fine appliqués, bracelets, and beads were uncovered in just one grave. Some of the findings are of strikingly exquisite making. The massive gold concave bracelets would challenge even the skilful modern jewellers. The oldest gold treasure in the world, dating from 4,600 BC to 4,200 BC, was discovered at the site. Varna Necropolis, Thracia (Bulgaria) is on the shores of the Black See and just south of Dacia (today Romania) across the river Danube.

Varna Gold

The Varna Necropolis Gold Treasure, Bulgaria
(4250 BC – 6260 years old)

So you can see that the relation between gold and Romania goes very far in history, as far as 6000 years and it is still very strong. 1857 is considered to be the industrial start of Romania’s oil industry. Very fast Romania became the “Texas of Europe” and the capital Bucharest the “Paris of the Balkans” because of the wealth oil brought. As you can observe in the chart bellow Romania converted its oil revenues into gold. Both Canada and Romania reached a relatively high lever of official gold reserves at that time. 1920 to 1940 corresponds to the Romanian oil boom. While Canada in the 80s started selling its gold reserves reaching zero in 2016 and replacing them with fiat currencies (US dollars, EU euro, etc.), Romania kept its gold reserves close to the level reached in 1930. What it means is that the 98 percent devaluation of most of fiat currencies since then did not affect Romania’s foreign exchange reserves in gold accumulated from the sale of oil. Romania’s oil reserves peaked in 1975 and dropped drastically since then to become marginal today.

Romania shipped 120 Tonnes of gold to Russia for safe keeping during World War I. As of 2014, Russia has returned just 33 kg of it according to a recent article. The Romanian-Russian treaty of 2003 did not mention the Treasure but the presidents of Romania and Russia decided to create a commission to analyze this problem, but no advances were made as of now. That would add another 97 Tonnes of gold to its actual 103.7 Tonnes gold reserves if and when it happens; almost doubling them to 200.7 Tonnes.


In the chart bellow you can see that Romania with 103.7 Tonnes of official gold reserves places very well compared with other countries both developed and developing. It ranks 32 out of 100 countries reported by the IMF.


If we look at official gold reserves as a percentage of foreign exchange reserves Romania with 11.1 percent is above the threshold recommended recently by economist Kenneth Rogoff of 10 percent. Romania ranks 33 out of 100 countries reported by the IMF as a percentage of forex reserves.


Another measure of official reserves is as a percentage of GDP. Here again with 2.2 percent Romania is very well positioned above the world average of 1.6 percent and the US of 1.7 percent. The gold to GDP ratio shows the true money available to support the economy and is preferred by some analysts.


Another interesting ratio to look at is on a per capita basis official gold reserves and here again Romania with 5.2 grams per person is well positioned both with respect to developed and developing countries.


Romania as most developing countries has a low public debt as a percentage of GDP but recently it also has been the fastest growing economy in the European Union. According to Frank Holmes, CEO, US Global Investors in a recent article, “In the first quarter [2016], Romania grew 4.3 percent year-over-year, beating the 3.9 percent analysts had expected, and up 1.6 percent from the fourth quarter of 2015. This places the country among the fastest growing EU economies, with the European Commission now expecting it to be the second fastest growing country in the 28-member bloc, behind only Ireland.



As you can see in the chart bellow the price of gold in Romanian Leu currency looks similar to the pattern in the US dollar or EU euro or in IMF’s SDR. I am sure it hasn’t escape the local population, very well accustomed to gold and hyperinflation, the inflation protection that gold offers. Since the collapse of the communist regime in December 1989 gold has more than protected any gold holder against inflation. From a recent article we learn that the biggest bank in Romania sold 3 Tonnes of gold in the last eight years. As I mentioned above soon after the revolution in 1989 at least one foreign bank (Piraeus Bank) from the start considered Romania a good place to sell gold and has been followed by others.

Romanian Leu

Romania stands out in gold as I showed you. It has a 6000 years affiliation with gold and still holds large amounts of official gold reserves and underground mine reserves. It is at the opposite of Canada, also a gold mining country, which has eliminated this year gold from its official international reserves. Romania was the envy of the Roman empire, especially close to the end of the empire, when it was running out of gold and silver and totally debased the Roman currency Denarius.

Soon Romania, a member of the European Union, will join also the euro which will bring another 103.7 tonnes of gold to the Euro Area official gold reserves. Asia has a lot of gold in private hands but Europe (not just the Euro Area) has also an enormous amount of gold in official reserves and also in private hands and out of sight. The Euro Area has (as of July 2016) 10,786.2 Tonnes of official gold reserves. The European Union has 11,549.5 Tonnes, all of Europe (excluding Russia, Belarus and Ukraine) has 12,621.3 Tonnes. If we add Russia, Belarus and Ukraine then Europe at large has 14,185.7 vs North America (Canada and US) 8,133.5 Tonnes. It’s almost double. You can’t ignore, when studying official gold reserves, the fact that almost every country in Europe has large amounts of gold reserves despite the collapse of the gold exchange international monetary system in 1971. Those reserves can play an important role in any reset of the international monetary system that will include gold.


Dacians gold bracelet from Sarmizegetusa Regia, dated the 1st century BC or 1st century AD


The hatching hen and the golden chicken
The Pietroasele Treasure found in Pietroasele, Buzău, Romania, is a late fourth-century Gothic treasure