Germany won't sell gold for another year

Section:

By Jana Randow
Bloomberg News
Monday, September 27, 2010

http://www.bloomberg.com/news/2010-09-27/bundesbank-plans-to-sell-6-5-to...

FRANKFURT, Germany -- The Bundesbank plans to sell no more than 6.5 metric tons of gold in the second year of an agreement between central banks to limit bullion sales.

Germany has the world's second-biggest gold reserves after the U.S. It sold 5.2 tons of the metal in the first year of the latest accord, which ended yesterday, according to data up to Sept. 14 compiled by the World Gold Council. The most it ever sold in one year was 12 tons in 2001, the data show.

"Apart from the sale of 6.5 tons to the Federal Finance Ministry already agreed to, the German Bundesbank won't make use of the selling option available to it in the second year of the new Gold Agreement," the Frankfurt-based Bundesbank said in the statement today.

Gold is heading for a 10th consecutive annual advance, the longest winning streak since at least 1920, spurring central banks globally to add the metal to reserves. Combined central bank holdings rose in every quarter since the second quarter of last year, data from the council show.

The first Central Bank Gold Agreement was announced more than a decade ago because of concern that uncoordinated selling was destabilizing the gold market and driving down prices. Gold fell from a then-record $850 an ounce in 1980 to $253.83 in February 2001. It reached a record $1,300.15 today.

Germany held 3,402.5 tons of gold in reserves as of this month, compared with 8,133.5 tons for the U.S., data compiled by the council show.



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