This is probably the reason for the fall in the POG tonight.
resourceinvestor.com
"Gold Tumbles as Rumours of Central Bank Sales Circulate
By Jon A. Nones
09 Sep 2006 at 02:29 PM
"St. LOUIS -- Gold fell more than 2% last week, plummeting $22 in the last two sessions. Both Peter Grandich, Editor of the Grandich Letter, and analysts from Action Economics alluded to the possibility of last minute gold sales by central banks within the European Gold Agreement (EGA) to hit the quota by the September 26 deadline.
"As of September 1, the 15 EGA central banks have reportedly sold roughly 340 tonnes. In order to hit the maximum amount of gold permitted by the agreement, the banks would have to sell about 160 tonnes in just under a month to hit the yearly quota of 500 ounces by the deadline. And the average amount of sales per month has been just 33.1 tonnes so far this year.
"Matthew Turner, commodities analyst with Virtual Metals, told Resource Investor that there's been all kind of rumours circulating in the market, but nothing is concrete.
“'Is there a possibility that the sales aren't being recorded? It's the only other explanation, possibly because of forward sales, but again there's no evidence,' he said.
"If gold sales are going unreported, Turner said the Bundesbank is probably the favoured explanation as it did have an option to sell up to 120 tonnes this year. However, Bundesbank said in March they would not be taking up their option to sell 120 tonnes of gold this year, and have since reported it has “given it away,” he said.
"France is just short of its 120 tonnes, and the Bank of Italy is another large holder whose intentions have never been revealed, but “I have to stress there is absolutely no evidence they have done anything,” Turner added.
"The European Central Bank’s (ECB) Weekly Return has been showing sales weekly of less than 5 tonnes for the past month or so, according to Turner. The only two EGA signatories that it doesn't cover are Switzerland and Sweden, and 'the former has finished its sales programme and the latter is only selling small amounts (10 tonnes),' he said.
"Turner said there was possibly another 2 tonnes sold last week. Tuesday is the next day for publication of the ECB Weekly Return. |
