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Central Bank gold sales may be lower than forecast
By: Tessa Kruger
Posted: '06-OCT-06 09:00' GMT © Mineweb 1997-2006
JOHANNESBURG (Mineweb.com) --Gold sales by signatories of the Central Bank Gold Agreement (CBGA) fell short of the annual 500 tonne quota at 393 tonnes at the end of the second Agreement year on 26 September. Sales under the remainder of the Agreement, running until September 2009, are unlikely to reach the annual quota of 500 tonnes for the full five year Agreement period, GFMS, a leading source of information on precious metals said in a statement.
Barclays Capital, though, does not concur, suggesting that the full sales quota may have been realised, but the figures did not appear in the statistics as they were forward sales.
However gold sales rose “markedly” in September, with Eurosystem countries selling approximately 55 tonnes. This rise in official sector sales could have had some adverse effect on the gold price during September, but GFMS maintains that investor liquidation across the commodities sector made a bigger impact.
There had been much talk in the market of a possible increase in Eurosystem sales and forward sales that had already taken place during this time.
A number of analysts contended that the speculation was pushing the second CBGA year annual figure towards its 500-tonne limit – contributing significantly to the slump in the metal’s price.
The decrease in Eurosystem sales could partly be attributed to improved sentiment towards gold, but it is more likely that some CBGA signatory countries are spreading out or delaying some of their planned sales.
“The fact that CBGA will probably not deliver the expected 500 tonnes of gold to the market each year and evidence of some side buy-interest elsewhere, suggests that official sales may have peaked in 2005.
“The lower level of sales expected in 2006 indicates a new trend of more moderate net selling from the offical sector”.
