ECB agreement POSITIVE for Gold

The ECB gold agreement (includes the ECB and 18 other banks) is POSITIVE for gold. The agreement is for a maximum of 400t/yr over 5 yrs (max of 2,000t), 100t/yr LESS than the previous 5-year agreement with the signatories indicating that the previously announced IMF sale of 403t can be accommodated within the agreement ceilings. Note that the IMF is not part of this deal, and still could elect to sell directly to a government entity.

The Swiss National Bank also issued a statement this morning that says it has no plans for any further gold sales in the foreseeable future.

Please see the following ECB press release.

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7 August 2009 - Joint Statement on Gold

European Central Bank

Nationale Bank van België/Banque Nationale de Belgique

Deutsche Bundesbank

Central Bank and Financial Services Authority of Ireland

Bank of Greece

Banco de España

Banque de France

Banca d'Italia

Central Bank of Cyprus

Banque centrale du Luxembourg

Bank Ċentrali ta' Malta/Central Bank of Malta

De Nederlandsche Bank

Oesterreichische Nationalbank

Banco de Portugal

Banka Slovenije

Národná banka Slovenska

Suomen Pankki – Finlands Bank

Sveriges Riksbank

Swiss National Bank

In the interest of clarifying their intentions with respect to their gold holdings the undersigned institutions make the following statement:

1. Gold remains an important element of global monetary reserves.

2. The gold sales already decided and to be decided by the undersigned institutions will be achieved through a concerted programme of sales over a period of five years, starting on
27 September 2009, immediately after the end of the previous agreement. Annual sales will not exceed 400 tonnes and total sales over this period will not exceed 2,000 tonnes.

3. The signatories recognize the intention of the IMF to sell 403 tonnes of gold and noted that such sales can be accommodated within the above ceilings.

4. This agreement will be reviewed after five years.