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Monday, September 27, 2010

Gold Sales Stopped at EU Central Banks

In adherence to the guidelines of the Central Bank Gold Agreement of Europe, in addition to Switzerland and Sweden, central banks in the region will stop selling gold reserves.

That will put an end to over ten years of selling the gold by the banks.

The CBGA puts a cap on collective sales by the banks.

This could provide even more support to gold, which already enjoys strong support, and is another piece of the underlying fundamentals which are driving gold prices up, taking supply out of the gold market.

Although there will probably be some instances of relatively small sales, expectations are the central banks will follow the overall Central Bank Gold Agreement they made.

Sales from the banks have already plummeted over the last CBGA year, dropping 96 percent to 6.2 tons.

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