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Adrian Douglas: Central banks don't tout gold sales anymore

Section: Daily Dispatches

By Adrian Douglas
Tuesday, September 21, 2010

I have just searched the Internet for commentary or news about the imminent end of the first year of the third Central Bank Agreement on Gold (CBGA), otherwise known as WAG3 (Washington Agreement on Gold 3), in which the 19 signatory European central banks agreed to limit their gold sales to 400 tonnes per year. The agreement's year ends on September 26 but there is nothing but stony silence about it.

So far the 19 signatories have sold only 6 tonnes of the allowed 400 in the current agreement year. There has never been an official statement, but it is generally assumed that the International Monetary Fund's gold sales are being made with respect to the tonnage quota left under the CBGA. So far the IMF has reported selling 222 tonnes to central banks and 86.5 tonnes on the market for a total of 308.5 tonnes.

There aren't the usual apologists for the anti-gold cartel suggesting that the remaining 91.5 tonnes in the first year's quota could be "dumped" in the few days remaining. This clearly is another sign that the gold market has changed. In fact, with the central banks of China, Russia, Venezuela, India, Sri Lanka, Mauritius, Bangladesh, and Thailand all being gold buyers in the last year, any propaganda about gold as a barbarous relic and central banks dishoarding it would be hilarious.

The anti-gold cartel seems to be trying to prevent any focus on gold. This has been true for the IMF gold sales this year. In contrast to the fanfare made about the IMF's plan to sell 402 tonnes in the first place and the 200-tonne sale to India last year, the IMF's market sales each month since February of approximately 15 tonnes per month have barely been publicized, like last week's sale of 10 tonnes to Bangladesh.

The sale of Western central bank gold no longer intimidates the market, and the surreptitious way of selling it now must be viewed as signifying embarrassment about Western central bank stupidity. After all, during the first two Central Bank Gold Agreements, the signatory banks disposed of almost 4,500 tonnes of gold at an average price of less than $500 per ounce. Gold is now above $1,200 per ounce.

Many Western central bankers now should be feeling more like barbarous relics themselves.


Adrian Douglas is editor of the Market Force Analysis letter ( and a member of GATA's Board of Directors.


Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property

On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.

Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."

For complete information on Sona Resources Corp. please visit:

A Canadian gold opportunity ready for growth

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Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource

Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.

For Prophecy's complete press release about its production plans, please visit: