Euro Central Bank Gold Sales Come To A Virtual Halt

Tuesday, January 17, 2006

Gold sales by the member central banks of the Eurosystem have come to a virtual halt in the last week. According to the weekly consolidated financial statement of the Eurosystem only one member of the Eurosystem has sold gold with a value of 7 million Euros in the week ending January 13. In the week before gold sales amounted to 77 million Euros.
The sudden slowdown in gold sales can be interpreted that the central banks have finally found out that it is not such a good idea to sell of the their hardest asset class which certainly has shown the best performance over the last 12 months.
But beware, my broker informed me today that the German Bundesbank, holder of the second largest gold reserves behind the USA might finally give in to the demands of the government and sell off up to 500 tons. According to most recent available data from the ECB Germany sits on a gold hoard of 110.207 million troy ounces that represent a dollar value of 61.716 billion or 47.925 billion Euros according to the official ECB valuation of 434.856 Euros per ounce.
Major banks and investment houses have mostly upped their gold price projections for 2006, with most of them seeing an annual average price at or above the current level of $560.


Wikinvest Wire