Gold and Silver Forecaster - Global Watch

By: Julian D. W. Phillips | Fri, Dec 29, 2006
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Below is a snippet from the latest weekly issue from |

Central Bank Gold Agreement - Sales in 2006

Note: This now includes the unannounced sales for both years from Spain & Belgium, which totaled 96.6 tonnes for the two years.

Latest sales under the C.B.G.A
The week ended the 22nd December saw one of the signatories of the Central Bank Gold Agreement sell and another BUY gold leaving a net sale of 2.7 tonnes of gold.

Yes, the holidays began at the end of last week even for the Central Banks, so what better time to throw the cat amongt the pigeons. In the seemingly innocuous statement above it seems that we are seeing a change in policy by European Central Banks that we have been expecting should happen, but in these bureaucratic halls felt that the issue was too stacked against it happening without a public drama. If this is the case it has been announced without a whisper, simply as part of their weekly report. The information is huge and in a nutshell is:

One Signatory to the Central Bank Gold Agreement has bought gold!

We must be cautious here, still, because We don't know how much was bought or why it was bought, so we cannot say for certain that there has been a major policy shift by one of the signatories. However, so as not to minimize this event, it definitely shows that at least one of the signatories has approved and acted on an approval to purchase gold. Consequently there does appear to have been by one of the signatories of the Central Bank Gold Agreement, a major change of policy on gold in their reserves.

Maybe this is a 'feeler' purchase to see just how the market will react once they realize what has happened. So far it appears that we are the frst to highlight this event. Once it becomes generally known perhaps it will affect the gold price?

If it is a change of policy of just one European Central Bank, we believe it will affect the thinking of other global Central Bankers and cause them to re-visit the place of gold in the monetary system.

If this is correct then the gold market could move firmly into center stage in 2007. With so little gold around, the race to acquire it by Investors across the spectrum could be fast and furious taking the gold price to new heights.

We will be developing these points in later issues of the Gold Forecaster.

Slovenia's joining the C.B.G.A.
We did not dwell on the standard statement issued when a new Central Bank joins the C.B.G.A. agreement, which reflects the initial position of all signatories to the agreement and that is,

"Banka Slovenije has agreed not to expand its gold leasing and its use of gold futures and options over the period of the agreement".

So as to absorb the full impact of this statement, we have to see that it strictly limits the activity of member Central Banks activity in the futures and options markets. However, it does not prevent them from both selling and buying gold. The agreement is only a limitation on the amounts to be sold and a restraint on future activity in the futures and options markets.

To read this week's entire issue, please visit |



Julian  D. W. Phillips

Author: Julian D. W. Phillips

Julian D. W. Phillips
Gold Forecaster

Julian D. W. Phillips

"Global Watch: The Gold Forecaster" covers the global gold market. It specializes in Central Bank Sales and details, the Indian Bullion market [supported by a leading Indian Bullion professional], the South African markets [+ Gold shares shares] plus the currencies of gold producers [ Euro, U.S. $, Yen, C$, A$, and the South African Rand]. Its aim is to synthesise all the influential gold price factors across the globe, so as to truly understand the global reasons behind the gold price.

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