Barclays suspects sneaky accounting of recent central bank gold sales

Section:

European Central Banks
May Have Sold Full Quota
of Gold, Barclays Says

By Claire Black
Reuters
Thursday, October 5, 2006

http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&stor...

LONDON -- Barclays Capital said on Thursday it believed that Europe's central banks sold the full 500 tonnes of gold in the second year of an agreement that regulates bullion sales.

Costanza Jacazio, precious metals analyst at Barclays, said at a commodity outlook briefing that the sales had not figured in the weekly financial statement issued by the European Central Bank due to the way the central bank reports them.

She said the statement excluded forward sales that Barclays believed to have happened in September but were not showing up yet.

Other analysts have said sales fell short of the quota during the year that ended on September 26.

European central banks have agreed to cap gold sales at 500 tonnes a year to avoid destabilising the market.

Jacazio said she did not expect to see a clarifying statement from either the ECB or individual central banks on this issue.

The fact that the banks might have met their full quota would possibly support prices in the short term, she added.

"The fall in gold prices (in September) was relatively small given the amount of selling we have seen through the month," she said.

Spot gold was quoted at $570.90/571.90 a troy ounce by 1256 GMT, up from $566.00/567.00 late in New York on Wednesday.

Prices hit their lowest since mid-June the previous day as weak oil prices soured investor sentiment across commodities markets.

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