European Central Banks Sell 144 Tons in 5th Year

In their fifth year of the gold agreement, European Central banks have sold roughly 144 tons of gold.  The fifth year of the pact started on Sept. 27 2008 and runs until Sept. 26 this year.  The allowed sales maximum was 500 tons, a number obviously unmet at the current time.  According to the figures, the 15 signatories to the accord disposed of 497.2 tonnes of the 500-tons allowance during the first year, 395.8 tons in the second year, 475.8 tons in the third year and 358 tons in the fourth year.  The main reason for this drop-off is that the gold price has had significant gains in the past years.  Holding gold makes the most sense when the gold price is booming and a return is made on the gold investment.

A third pact, to run from Sept. 27 until Sept. 2014, was announced on Aug. 7, and will limit gold sales to 400 gold tons a year.  Central banks and the International Monetary Fund (IMF) collectively hold 29,697.1 tonnes of gold in their reserves, but have been gradually reducing their holdings.  In March 2004, fifteen European central banks renewed a 1999 pact to limit their sales over a five-year period to 2,500 gold tons, up from 2,000 gold tons in the first agreement, and with annual sales limited to 500 tonnes.  The signatories as of the most recent agreement are Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, Switzerland, Greece and the European Central Bank.  The world’s largest holder of gold as of June 2009 is the United States with 8,133.5 gold tons.  With an ever-increasing gold price, we can expect gold sales to be diminished by many countries.