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GATA distributes international press release about remonetizing silver in Mexico
Gold Rises as Bundesbank Says
It Won't Fulfill Gold Sales Quota
By Laura Humble
Bloomberg News Service
Monday, December 20, 2004
http://www.bloomberg.com/apps/news?
pid=10000082&sid=ayzkTUeJcnKc&refer=canada
LONDON -- Gold rose in London after the German
Bundesbank, the world's second-largest gold holder,
said it won't fulfill its option to sell 120 tons of
bullion under the first year of an accord with 14
other central banks.
The accord, which came into force in September,
limits gold sales by participants to 500 tons a year
through 2009. The Bundesbank will sell only 8 tons
of gold coins in the first year, Hans-Helmut Kotz, a
board member of the bank, said in an interview. The
rest of the bank's quota may be taken up by the other
accord signatories, he said.
"There is no certainty that the Bundesbank will sell
meaningful quantities of gold," John Reade, UBS AG's
London-based precious metals analyst, said in an
e-mail."Even if they say that other central banks will
sell their quota, if the bank remains a non-seller, then
the arithmetic makes it look less likely that the full
2,500 tons will be sold. This will be positive for the
gold market."
Gold for immediate delivery in London was up 89
cents, or 0.2 percent, at $442.39 an ounce in London
at 12:29 p.m. It reached a 16-year high of $456.89 on
Dec. 2.
"From our option, 112 tons remain unused, which other
banks in the euro system can now decide on,"
Bundesbank board member, Hans-Helmut Kotz, said in
an interview in Frankfurt. "We haven't taken a decision
about 2005. That will happen some time next year."
Gold prices may have also been boosted as the dollar
fell for a second consecutive trading day against the
euro.
A weaker dollar boosts the appeal of the
dollar-denominated metal for investors seeking to
hedge against declines in U.S. assets. Gold has gained
9 percent in the past three months as the dollar has
fallen that amount against the euro.
The dollar was down at $1.3370 per euro, from
$1.3307 late in New York on Dec. 17. The U.S.
currency reached a record low of $1.3469 on Dec. 7.
Gains in gold may have been capped by traders who
are reluctant to buy more metal before the end of the
year.
Hedge funds and other large speculators slashed
their net-long position in New York gold futures last
week to book profits before 2005, analysts said.
Speculative long positions, or bets prices will rise,
outnumbered short positions by 87,794 contracts on
the Comex division of the New York Mercantile
Exchange in the week ended Dec. 14, the U.S.
Commodity Futures Trading Commission said.
Net-long positions fell by 44,553 contracts, or 34
percent, from a week earlier.
"After the scale of liquidation, gold should remain
in an orderly mood with fresh moves higher set to
be seen in the New- Year," James Moore, a
precious metals analyst at the U.K.-based
TheBullionDesk.com, said in an e-mailed report
today.
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