Agoracom Blog

Gold Supply Tightens With Germans And Swiss Halting Reserve Sales

Posted by AGORACOM at 9:20 AM on Tuesday, September 30th, 2008

Good morning to you all.  On September 17th I discussed the increasingly tight supply of gold that led Bloomberg to run a story about prices running to $950/oz. The story cited decreased production, increased demand and falling Central Bank sales in 2008.

With respect to the latter point, we heard from two Central Banks yesterday.Germany’s Bundesbank will hold on to the vast bulk of its gold reserves in the next 12 months, the central bank said on Monday.

First, Germany’s Bundesbank, the second-largest holder of gold behind the U.S. Federal Reserve, said it would not sell any more gold apart from 6.5 tonnes to the German finance ministry that was already agreed upon.

Second, the Swiss National Bank reported it concluded the sale of 250 tonnes of gold, announced in June 2007, and said it had no plans for any further gold sales.

SNB is now holding 1,040 tonnes and stated it planned no further reduction.



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