interesting article about the sale of gold from Belgium
Wednesday March 18, 6:23 pm Eastern Time
FOCUS- Nervous gold in the commodity spotlight
LONDON, March 18 (Reuters) - Gold dealers nerves were stretched to the limit today as the price first fell on central bank sale rumours and then bounced when it appeared the metal would remain in strong hands.
Industrial metal prices were all lower while among soft commodities there was some concern about drought affecting the Vietnam coffee crop.
In late U.S. trading on Tuesday and early European business on Wednesday gold was driven down from around $294.00 an ounce by persistent market talk of a central bank gold sale.
Just after confirmation by Belgium that it had sold 299 tonnes the price hit the day's low of $286.75.
But from then on the market moved into recovery mode, particularly when the Belgian central bank clarified that it had sold the gold to five other central banks, without naming them.
By the close of the European session gold was trading around $290.45 an ounce.
''The fact that the gold has gone to other central banks I would say is a positive sign for gold,'' one dealer said.
Belgian National Bank governor Alfons Verplaetse said the sale, revealed for the first time in the bank's weekly statement, had started in 1997 and was now concluded.
''In order to avoid any impact on prices in the gold market, these operations were carried out exclusively with different central banks,'' Verplaetse told a news conference.
Questions raised by another dealer, who also saw the sale as positive, included who the five central banks might be and what they intended to do with the gold they had bought.
''I perceive it to be reasonably positive news because it shows that there are other banks out there who believe in gold,'' the dealer said.
''Who they are would be very interesting to see -- whether they will keep it on their books for six months and then sell it on or whether they want it as part of their reserves.'' |
