Gold Forecaster
- Global Watch
Central Bank Gold Agreement
- Sales in 2006
Julian D.W.
Phillips
Gold Forecaster snippet
Jan 2, 2007
Note: This now includes
the unannounced sales for both years from Spain & Belgium,
which totaled 96.6 tonnes for the two years.
 Latest sales under the C.B.G.A
The week ended
the 22nd December saw one of the signatories of the Central Bank
Gold Agreement sell and another BUY gold leaving a net sale of
2.7 tonnes of gold.
Yes, the holidays began at
the end of last week even for the Central Banks, so what better
time to throw the cat amongt the pigeons. In the seemingly innocuous
statement above it seems that we are seeing a change in policy
by European Central Banks that we have been expecting should
happen, but in these bureaucratic halls felt that the issue was
too stacked against it happening without a public drama. If this
is the case it has been announced without a whisper, simply as
part of their weekly report. The information is huge and in a
nutshell is:-
We must be cautious here, still,
because we don't know how much was bought or why it was bought,
so we cannot say for certain that there has been a major policy
shift by one of the signatories. However, so as not to minimize
this event, it definitely shows that at least one of the signatories
has approved and acted on an approval to purchase gold. Consequently
there does appear to have been by one of the signatories of the
Central Bank Gold Agreement, a major change of policy on gold
in their reserves.
- Could this be a signatory
that has not sold previously and now wants to buy? If so how
much more will it buy?
- Is this a signatory that has
reversed its policy on selling and now wants to buy in the future?
- Perhaps this was a "housekeeping"
purchase [but cannot see why it could be?] to tidy up the books,
but this just doesn't make sense.
- This is an event that has
not happened for almost three decades.
- It is deeply significant that
a European Central Bank [not just one of the Arab or Asian banks]
should actually buy.
Maybe this is a 'feeler' purchase
to see just how the market will react once they realize what
has happened. So far it appears that we are the frst to highlight
this event. Once it becomes generally known perhaps it will affect
the gold price?
If it is a change of policy
of just one European Central Bank, we believe it will affect
the thinking of other global Central Bankers and cause them to
re-visit the place of gold in the monetary system.
If this is correct then the
gold market could move firmly into center stage in 2007. With
so little gold around, the race to acquire it by Investors across
the spectrum could be fast and furious taking the gold price
to new heights.
We will be developing these
points in later issues of the Gold Forecaster.
Slovenia's joining
the C.B.G.A.
We did not dwell on
the standard statement issued when a new Central Bank joins the
C.B.G.A. agreement, which reflects the initial position of all
signatories to the agreement and that is,
"Banka Slovenije has agreed
not to expand its gold leasing and its use of gold futures and
options over the period of the agreement"
So as to absorb the full impact
of this statement, we have to see that it strictly limits the
activity of member Central Banks activity in the futures and
options markets. However, it does not prevent them from both
selling and buying gold. The agreement is only a limitation on
the amounts to be sold and a restraint on future activity in
the futures and options markets.
-Julian D.W. Phillips
email: gold-authenticmoney@iafrica.com
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