Tuesday, 19th October 2004 (2569 views)

London metals researcher GFMS has reassured South Africa that Central Bank gold sales will not have a negative effect on the gold market.

The Central Bank Gold Agreement was renewed last month and is made with the European Central Bank and 14 other banks, to set a limit on gold sales, according to Business Day.

According to GFMS the renewed gold sales are unlikely to be a major disruptive factor and that demand needs to expand by 2.3 per cent to absorb additional Central Bank sales.

Under the new agreement, there will be a sales programme throughout the next five years, with annual sales not rising above 500 tonnes and total sales not exceeding 2500 tonnes.

This time the limit on sales has been increased by 25 per cent, compared to the original agreement.

GFMS explained that although an extra 100 tonnes of gold may seem "somewhat daunting" it is really "pretty small".

 

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