thanks Louis.
As for the Russian Central Bank, they will NOT be buying gold on the open market, literally.
Instead, my understanding is Russians will not permit all Russian gold to be exported/sold. The Russian Central Bank will buy this Russian produced gold instead of it being exported/sold. This does take physical gold that normally would be sold on the open market and places this gold into Russian CB coffers. So essentially the same result. But the gold accounting will get even murkier since we likely will have to estimate how much Russian produced gold is going into Russian CB...
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here is Julian Phillips take on CB sales.
Last week’s Gold Sales
under the Central Bank Gold Agreement
And the tonnage sold is dropping. Now back down to 8 tonnes sold by two banks, no doubt France being one of them. We do suspect that the decision to lower the amount sold was a dealing decision not structural. When Technical resistance levels were broken, the prospect of gold falling back having peaked dissipated and much higher levels came onto the screen. After all, if you hurry to sell at below $500 and the price until next year averages well above that, you look like Britain’s Brown does now. When you are the custodian of the nation’s savings, a well-qualified Central Banker, it’s a bit embarrassing to report that you sold your nations reserves of gold under the present market price?
With 109 tonnes of the total of 500 tonnes already sold to date and another 9 months of the year to go, it is wise to hold back.
We believe that France sold as much as 6-7 tonnes of this amount and will keep up this steady pace for the next 9 months. Then at least they can plead that their task was to sell and they sold evenly, they didn’t play the price. That’s playing it safe!
And the effect on the market has not been lost. With few sellers in the market still if you remove 8 tonnes supply from this market, the gold price has to take off doesn’t it?
What is very important is to realise the fine balance in the market place that this action showed. As the gold price has continued to roar, we guess that the amount sold next week will be around the same level and from France.
The reports we receive on other Central Bank activities are not sufficiently frequent to see whether the Central Banks of Argentina, South Africa, or Russia are buying. They will simply take local production into stock and report later in their usual reporting schedule. We will have to wait and see on that front!
