SA Reserve Bank has no plans to sell gold
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LONDON — The SA Reserve Bank will refrain from selling any of its gold reserves, Reserve Bank assistant GM Alan Colburn told delegates at the Gold Fields Mineral Services seminar in London on Thursday. European Central Bank (ECB) official Werner Studener meanwhile said that under no circumstances would the ECB "actively manage" its gold reserves in the next four years.
Colburn said that while SA had a large percentage of the world's underground reserves of gold — about 4-million ounces — it would not benefit from sales of the commodity.
The Bank, he said, would only lend to the market if there was a significant price spike, and then only in small deposits of about 320 000 ounces if the rate of return was "large enough."
Colburn was positive however on the proposed sales of gold by the European central banks.
"The Reserve Bank welcomes initiatives to stimulate the demand for gold," he said.
Meanwhile, ECB deputy director-general Werner Studener said the current and future effect of gold sales had an important role to play in the market.
"It is difficult for the public sector to commit to it (the plan for gold sales) for eternity," he said. However, Studener said if market participants expected central banks to loosen the tightness in amounts of gold available for sale, then they could anticipate falling prices.
The Washington Agreement, concluded between the 15 central banks in September last year, "was the best way to ensure stability" in the gold markets, Studener said, with its "absolute" transparency regarding sales and the times of sales.
The 15 central banks committed to sales of about 400 tons in an unprecedented agreement in September last year, which led to an immediate spike in the gold price. Since then, the gold price has steadily decreased to its current levels about $270 an ounce on Thursday.
The 15 central banks hold 33 000 tons of gold in their vaults. According to Studener, gold "is part of our inheritance, and we should treat it as such."
He said that the difference between gold and other commodities was that all the gold mined by previous generations was still available for re-use, and subsequently the volatility of gold was less than that of other commodities.
This time dimension, Studener said, meant that gold was similar to money markets rather than other commodities. — BridgeNews. |
