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Central banks seen rescuing dollar with more gold sales

Section: Daily Dispatches

Maybe even Bloomberg's Claudia Carpenter
can figure it out now....

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Gold Falls as Central Banks Increase Sales

By Claudia Carpenter
Bloomberg News Service
Wednesday, July 25, 2007

LONDON -- Gold fell in London on speculation European central banks will increase sales of the precious metal. Silver also dropped.

The European Central Bank said yesterday three members of the Eurosystem of national banks sold 288 million euros ($397 million) of gold last week, equal to about 18 metric tons and up from 88 million euros the week before. European central banks may sell 157.6 tons in the next nine weeks, or an average of about 18 tons a week, according to World Gold Council figures.

"We may need to get very used to the fact that 18 metric tons of gold are going to become commonplace for the next two- and-a-half months," Dennis Gartman, trader and editor of the Virginia, U.S.-based Gartman Letter, said in his daily report today. That amount will "make it difficult for gold."

Gold for immediate delivery dropped $4.41, or 0.7 percent, to $676.59 an ounce at 2:17 p.m. in London. Silver fell 10 cents, or 0.8 percent, to $13.14 an ounce. On the Comex division of the New York Mercantile Exchange, gold futures for August delivery fell $8.20, or 1.2 percent, to $676.60 an ounce.

European central banks have sold 342.4 tons of gold as of July 20 under an agreement that caps annual sales at 500 tons through Sept. 26, London-based World Gold Council investment research manager Natalie Dempster said. That includes 13.9 tons sold by Switzerland in June, she said. They were the biggest sales by the Swiss National Bank since March 2005, according to figures on the bank's Web site.

The Eurosystem comprises the ECB and the national central banks of the countries using the euro.

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