Mostly: Classical

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Record central bank gold sales seen
Justin Brown
Tue, 15 Nov 2005
London-based GFMS is forecasting record net gold sales by central banks in 2005 of about 700 tons, up from over 500 tons in 2004, GFMS Executive Chairperson Philip Klapwijk said on Tuesday.

Over the past 15 years, the trend has been for central banks to be net sellers of gold, in contrast to the more variable experience in the 1970s and 1980s, when the central banking sector was often on the buy side of gold.

Since 1999, the value of gold's share of central bank reserves has declined from 15 percent to nine percent, Klapwijk said at the London Bullion Market Association (LBMA) Precious Metals conference.

Global gold holdings are very much skewed towards the US and the 15 central bank gold agreement signatories, where gold as a percentage of total reserves amounted to around 64 percent and 42 percent respectively at the end of June 2005, he added.

By contrast, according to the International Monetary Fund, China held only just over one percent of its reverses in gold and Japan with a similar percentage, Klapwijk said.

"For the foreseeable future, we expect the central bank gold agreement group will continue to reduce its, arguably excessive, gold position," he added.