European Central Banks Agree to Cap on Gold Sales
Well at least they aren't unloading the stuff on Ebay to China.
European central banks agreed to a third five-year cap on gold sales and said planned disposals by the International Monetary Fund could be done within the accord.
The European Central Bank and 18 other banks agreed to sell no more than a combined 400 metric tons of the metal a year through September 2014. That’s less than the annual cap of 500 tons in the current agreement, which expires Sept. 26.
“It’s positive for gold,” John Reade, an analyst at UBS AG in London, said by e-mail. Having the agreement “removes the small chance that European central banks would have dumped gold onto the market in an unconstrained manner.”
Central banks sold 73 percent less gold in the first half and full-year disposals may drop to the lowest since 1994, according to estimates from London-based researcher GFMS Ltd. The IMF wants to sell 403 tons from its reserves of 3,217 tons, the third-largest holding after the U.S. and Germany.
“The IMF has not signed and this leaves open the possibility that the Chinese, Russians, another central bank, could buy the 403 tons of IMF gold in one go,” Reade said.
China has the world’s sixth-largest holding at 1,054 tons and Russia is ranked 10th with almost 537 tons, World Gold Council data show.
Gold for immediate delivery in London slipped 0.8 percent to $955.92 an ounce by 3:14 p.m. local time today as a stronger dollar curbed bullion’s appeal as an alternative investment. The metal reached $971.68 yesterday, the highest since June 5.
Expect to see gold suffocated further as the boys in the nut vice (you know who you are, JP Morgan) flee to the safety of the yellow stuff. Did I say safety? That's surely not their motivating factor, is it?