No central bank advantage in gold sales-BOF banker PRAGUE, June 16 (Reuter) - Several central banks which had sold gold from their reserves now feel there is no longer an advantage on selling more bullion, a French central bank official said on Monday.
Jean-Pierre Patat, general manager of the foreign department at the Banque de France (central bank) told delegates at the Financial Times Gold Conference the reasoning now was that any advantage was outweighed by the loss on remaining reserves from reducing the gold price.
He noted that only a net 239 tonnes of gold was sold by the official sector in 1996 which was close to the average sale of the past several years. Yet the gold price fell and the market was depressed.
``It seems the market is more influenced by psychological phenomenon than central bank gold sales,'' Patat said.
He said the run up to European Monetary Union (EMU) in 1999 should not be seen as an opportunity for European central banks to sell gold.
``Monetary policy is based on co-operation therefore there is no likely impact from gold sales,'' he said.
Central banks were often criticised as treating their gold reserves with ``inertia'' but it was not in the central banks' interest to sell reserves to maximise profit.
``Gold reflects long term confidence in a currency and is an asset of last resort,'' he said.
The Maastricht Treaty on EMU allows for $50 billion of gold to be transferred to the European Central Bank from national central banks. The transfer of gold represents a strong commitment to Europe and should not affect the market price, he said.
The transfers would probably be done at market value at the date of transfer and the difference between the valuation by each central bank and that price would bring a capital appreciation for the banks.
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