To:Keith Zhang who wrote (207) From: John Barendrecht Friday, Jul 4, 1997 10:21 PM Respond to of 79916
Banks well equipped to sell RBA gold -dealers MELBOURNE, July 4 (Reuter) - Any number of large banks could have handled the sale of 167 tonnes of gold by the Reserve Bank of Australia, bullion dealers said on Friday.
``It would presumably have been done by a large bank,'' one senior dealer for an international bank said.
``It could have been done central bank to central bank, but I suspect it would have been handled by a large market player, that is a commercial bank,'' he said.
Central banks were showing little interest in increasing their supplies of gold, the dealer added.
Hefty oustanding short positions in the international market meant the gold would probably be readily absorbed, another dealer said.
The RBA has said it had sold the gold, representing more than two-thirds of its holdings, over the past six months.
At current prices, the gold was worth some US$1.8 billion.
The actual dispersal of the gold into the market would have been a relatively simple task, the dealers said.
``Any one of the majors could have done it,'' another dealer said.
``It's just a matter of feeding it into the market. ''it's not a difficult operation,`` the dealer added.
Typically, as the gold is delivered into forward markets, liquidity should rapidly rise, putting downard pressure on gold lease rates.
However, with the RBA sales, the additional liquidity may be delayed, some dealers suggested.
``I think you'll find what they're doing is selling the forward dates, then withdrawing their lending line to meet their forward obligations,'' said one. ``Consequently, it may create some short-term tightness.''
The sales reduced the RBA's gold holdings to 80 tonnes from 247 tonnes, and were undertaken forward, it said in a statement.
The first 125 tonnes were delivered in June, and the remainder woulds be delivered in August and September.
``The sales were made gradually, taking care not to disrupt market conditions,'' the RBA said in announcing the sale.
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