European central banks may end restrictions on gold sales

European central banks may end a 15-year-old restriction on sales of their gold holdings this year, a top German central banker said.
“The negotiations are still ongoing,” Deutsche Bundesbank board member Carl-Ludwig Thiele said in a recent interview with The Wall Street Journal. “No one can see into the future, and therefore it is currently under discussion whether it should be continued,” he added. The Bundesbank currently holds around 3,400 metric tons of gold.
In 1999, 15 European central banks agreed to sell no more than a total 400 tons of the precious metal over the following five years. The agreement was extended in 2004 among a slightly smaller group of participants, but the maximum was increased to 500 tons. Finally in 2009, the then 17 central banks of the Eurosystem, the Swedish Riksbank and the Swiss National Bank extended the agreement for another five years, lowering the maximum back to 400 tons over the next five years.
Mr Thiele indicated that one reason the agreement may not be extended is because over the past five years central bank gold sales have decreased significantly. Instead, central banks around the globe have increased their holdings in the aftermath of the financial crisis. In previous years, it has only parted with four-to-five tons, which it gave to the Finance Ministry to use for making gold coins.
Otherwise “we’re not selling any gold,” Mr Thiele said.
Source:Bullion Bulletin

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