Are central banks really buying gold?

[Chomsky]

Or just decreasing their sales of it? This article implies the latter:

Central Banks Gold Disposals Drop 40% in Accord, World Gold Council Says


Stuart Wallace, On Monday September 27, 2010, 2:39 am EDT

Central banks and the International Monetary Fund sold about 94.5 metric tons of gold in the year that ended yesterday, the lowest amount under an agreement that began in 1999, according to data from the World Gold Council.

Eurozone banks disposed of 6.2 tons, led by Germany, Greece and Malta, while the International Monetary Fund sold 88.3 tons. The figure for the eurozone banks was 96 percent below last year’s 142 tons. The data run through Sept. 14 and the first year of the third five-year agreement ended yesterday.

Gold is heading for a 10th consecutive annual advance, the longest winning streak since at least 1920, spurring central banks globally to add the metal to reserves. Combined central bank holdings rose in every quarter since the second quarter of last year, data from the council show.

The Central Bank Gold Agreement was announced more than a decade ago because of concern that uncoordinated selling was destabilizing the gold market and driving down prices. Gold fell from a then-record $850 an ounce in 1980 to $253.83 in February 2001. It reached a record $1,300.07 on Sept. 24.

Signatories to the latest accord are limited to combined annual sales of 400 tons, down from 500 tons in the previous agreement. Sales under the previous agreement had dwindled to 157 tons by its final year, ending in 2009. Sales by eurozone banks have declined every year since 2006.

The IMF said in September 2009 it would put 403.3 tons of bullion up for sale as part of a plan to shore up its finances and lend at reduced rates to low-income countries.

Members of the current accord are: the European Central Bank, Belgium, Germany, Ireland, Greece, Spain, France, Italy, Luxembourg, Netherlands, Austria, Portugal, Finland, Sweden, Switzerland, Slovenia, Cyprus, Malta and Slovakia.

http://finance.yahoo.com/news/Centra...&asset=&ccode=

[thriftyandboringinohio]

Re: Are central banks really buying gold?

Thanks, Chomsky.
Way back when I first bought physical, it was the imbalance between supply and demand that cinched the deal for me.
With more gold being bought than was mined, the price simply had to rise.

The difference between central banks not selling much and central banks actually buying could have important effects on that balance.
Both scenarios imply higher gold prices, but one more than the other,

[Chomsky]

Re: Are central banks really buying gold?

Thanks, Chomsky.
Way back when I first bought physical, it was the imbalance between supply and demand that cinched the deal for me.
With more gold being bought than was mined, the price simply had to rise.

The difference between central banks not selling much and central banks actually buying could have important effects on that balance.
Both scenarios imply higher gold prices, but one more than the other,

Thanks. Also I now note that the article lists accord members mostly from Europe, but conspicuously absent are the banks of China and India, who I believe have been net buyers of gold.

[c1ue]

Re: Are central banks really buying gold?

But you'll note of the 94.5 metric tons sold, 88.3 were sold by the IMF.

And who bought this IMF gold?

The article is furthermore suspect given that China, Russia, and a number of other nations clearly had large net gold purchases.

The original article is also not easily found on the World Gold Council site (I didn't find it), and their latest report specifically mentioned that the BIS gained 346 tons via swaps and that Russia bought 74 tons of gold.

[Slimprofits]

Re: Are central banks really buying gold?

The original article is also not easily found on the World Gold Council site (I didn't find it), and their latest report specifically mentioned that the BIS gained 346 tons via swaps and that Russia bought 74 tons of gold.

here it is:

http://www.reserveasset.gold.org/

scroll down to, under the STATISTICS heading, World official gold holdings – to September 2010

What's interesting about this, is they didn't issue a press release, but someone wrote that one article (complete with misleading info.) that was copied in hundreds of newspaper and wire websites around the world...

[doom&gloom]

Re: Are central banks really buying gold?

no one wants to call attention to the fact that the banksters themselves are losing faith in fiat money...

[Jay]

Re: Are central banks really buying gold?

no one wants to call attention to the fact that the banksters themselves are losing faith in fiat money...

Post of the day for me.

[Sharky]

Re: Are central banks really buying gold?

Sure, some central banks have sold gold. However, for every seller, there is also a buyer.... In an environment where governments want to keep the price down, it pays to announce sales and neglect to mention the corresponding purchases.