Prospective German Sales of Gold
Speculation surrounding the future sales of gold by the leading Central Bank holders of Gold, received clarity today.
Within the auspices of the Central Bank Gold Agreement, the gold market has been speculating on the review and renewal of the "Washington Agreement". The market felt that the leading holders of gold want to sell their gold holding, but it became clear that the bulk of these sales would have to come from the leading Central Bank signatories to the Washington Agreement, Germany, France and Italy. The most talked about vocal of these three has been Germany, leading the market to believe they would be significant sellers.
Today, Thursday 4th September, Finance Minister Hans Eichel clarified Germany's position regarding sales of its own gold. He said that he would envisage the sale of only small quantities of gold by the Bundesbank if a new international agreement on gold sales is reached.
"The gold market is sensitive and if the Bundesbank takes part in a new gold agreement, they can only enter the market in small amounts," he said.
This is good news for the gold market whilst tacitly indicating that the other two, with a greater propensity to holding gold in their reserves, will not be significant sellers, if at all, of their own gold holdings.
With only minor Central Banks still indicating they would be sellers of gold, the market will have to get used to the idea of greatly diminished gold supplies emanating from the "Official" sources.
Additionally, his statements have encouraged the market to believe there will be a renewal of the Central Bank Gold Agreement.
These statements will be discussed further in the latest Issue of Gold-Authentic Money's Newsletter and in the "Gold - The Weekly Perspective" produced later today.