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Gold sales to be subdued in final year of Central Bank Gold Agreement

The World Gold Council this week announced that European central banks have reported selling a total of 91 tonnes of gold from the 500 tonnes permitted under the Central Bank Gold Agreement (CBGA). The fifth and final year of the CBGA started on Sept. 27, 2008 and the 91 tonnes represent sales in the first six months. Total sales in the 2007-2008 year were 358 tonnes and sales in 2006-2007 year were 475.8 tonnes. A spokesman for the World Gold Council noted, With France and Sweden currently the only professed sellers, the rate of sales has slowed noticeably and is likely to remain subdued for the remainder of year 5. The CBGA was renewed in 2004 by 15 European central bankers after the pact signed in 1999 expired. The CBGA limits annual gold sales to 500 tonnes and caps total gold sales to 2,500 tonnes over five years in an attempt to moderate the flow of gold to the market. In the first four years of the agreement, 1,727 tonnes of gold were sold. As of the end of 2008, the largest holders of gold in the world were: the United States, Germany, the International Monetary Fund, Italy, France and Switzerland.
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