ECB sold gold despite saying otherwise earlier

Wednesday, May 04, 2005

Gold bugs won't like this piece of news. Two Central banks of the Euro system took advantage of the high gold price and sold about 54 tons of gold last week, based on an assumed gold price of 435 dollars per ounce. According to the latest consolidated weekly financial statement of the Eurosystem, the position "gold and gold receivables" shrank 528 million Euros or 0.41 percent to 127,431 billion Euros. This contradicts a former ECB statement that had claimed the central bank would abstain from further gold sales until September 26, 2005.
In a press release from March 31 the ECB had said it "has completed a programme of gold sales amounting to 47 tons of gold. These sales are in full conformity with the Central Banks' Gold Agreement, dated 27 September 2004, of which the ECB is a signatory. It is not the ECB's intention to sell more gold for the first year of the agreement, starting on 27 September 2004 and ending on 26 September 2005."
The central banks of the Euro zone signed a new gold sales agreement last September that allows them to sell 500 tonnes per gold annually in the next five years.
The German Bundesbank, one of the biggest gold holders in the world, has so far stubbornly refused to cave in to political pressure to sell some of its gold reserves in order to help the German finance minister reducing the budget deficit of his country. In February 2005 Germany's gold reserves had a value of 36,348 billion Euros or 28.5 percent of total gold reserves in the Euro zone. France is also holding on to its gold reserves.


Wikinvest Wire