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European Central Banks Sell 1.1 Metric Tons Of Gold Under CBGA – WGC

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posted on Sep, 27 2011 @ 10:10 AM

European Central Banks Sell 1.1 Metric Tons Of Gold Under CBGA – WGC

European central banks sold a gross 1.1 metric tons under the third Central Bank Gold Agreement, the lowest annual sales since the agreement began in September 1999, the World Gold Council said Tuesday.

The current agreement allows European central bank signatories to sell 400 tons of gold collectively per year. This is the third CBGA agreement, which is in its second year. Monday marked the end of the second year.

“European central banks’ appetite for gold sales has dissipated since the onset of the financial crisis. During periods of such intense economic and financial market turbulence gold adds much needed stability to a central bank’s reserves,” said Natalie Dempster, director of government affairs for the World Gold Council.

Last year there was a similar disinterest to sell, with European signatories selling just 7.1 tons of the 400 tons allowed.

Central banks in many countries, particularly in emerging markets, have been gold adding to their reserves over the past two years, Dempster said.

“As a whole, central banks are now large net buyers of gold having re-evaluated their reserve asset management policies and we expect them to remain so for the foreseeable future,” she said.

The CBGA started in 1999 and in the first five years, central banks were sellers of the full amount, set at 400 tons at the time. Between 2005-2009, a second CBGA was enacted and the ceiling limit was lifted to 500 tons, but signatories had undersold the limit. The limit was lowered back to 400 tons in the current agreement, which runs through September 2014.

Is this what's causing the recent downward pressure or is this something too small to make an impact?

edit on 9/27/2011 by wisdomnotemotion because: more info

posted on Sep, 27 2011 @ 10:21 AM
Brazil Government Preparing For Greek Default This Week, Valor Reports

Alas, as Europe is about to find out, this works both ways, because as Brazilian financial site Valor Economic reports, none other than perpetual optimist Brazil, the same country that is supposedly according to one set of rumors preparing to bail out all of Europe, with or without the rest of the BRICs, is now preparing for a Greek default within the week. From Valor: "Something must happen. Greece is a few days [from bankruptcy]" said a high official source.

Politicians are politicians, bankers are bankers. Everyone denies when everyone denies.

I guess it's a desperate move by ECB to save the economy by selling gold. Eventually, they'll realize it's the worst mistake in their lifetime.

posted on Sep, 27 2011 @ 10:25 AM
reply to post by wisdomnotemotion

According to your linked article, they are allowed to sell 400 tons and only sold 1.1, meaning they don't want to sell too much gold because it adds stability.

They (global gold regulators) lowered the margin call for gold, causing many people to have to sell. The margin is a "loan", in which people can buy more by borrowing a certain amount. When they lower the margins, they lower the amount people can borrow. When they call the margins, they are calling in the loans.

It's the same thing that caused the stock market crash of 1929. The banksters got together and decided to call ALL the margins at the same time, and everybody had to sell everything, no matter how cheap, in order to survive it. It was deliberate, planned, and evil. Then JP Morgan caused a rumor to circulate that the banks were insolvent, causing people to freak out and demand their money all at the same time. He then came in with his bankster buddies and scooped up these bank assets for pennies on the dollar.

Those who do not remember history are doomed to repeat it. All of these big swings on stocks are deliberate manipulations so a few jerks can make money, and the outsiders are left out to dry.

posted on Sep, 27 2011 @ 10:30 AM
reply to post by FissionSurplus

I concur.

Moral of the story is GET PHYSICAL because crash is just around the corner

posted on Sep, 27 2011 @ 10:43 AM
I think we need to get physical with the thieves who have looted the economies of many countries with their manipulations and corruption.
The whole problem in a nut shell is simply that the elite have stolen far too much money for the system to go on working.
They are like the people who killed the goose which layed the golden eggs.
We need radical wealth redistribution in this world!

posted on Sep, 27 2011 @ 06:00 PM

Originally posted by FissionSurplus
They (global gold regulators) lowered the margin call for gold, causing many people to have to sell. The margin is a "loan", in which people can buy more by borrowing a certain amount. When they lower the margins, they lower the amount people can borrow. When they call the margins, they are calling in the loans.

With all due respect, I'd like to make a few comments.

The Comex futures exchange is the metals division of NYMEX (New York Mercantile Exchange). NYMEX operates under the umbrella of the CME group (Chicago Mercantile Exchange). The CME is not a global regulator, rather, it is a domestic commodities exchange with the authority to raise or lower margin requirements as market conditions dictate. *See closing remarks*

The CME didn't lower margins, it raised them...both initial and maintenance margins.

Margin isn't a "loan". In essence, margin is akin to a performance bond or good faith deposit. Initial margin is the amount of capital a trader is required to deposit on account in order to open (initiate) a new position. As of yesterday, the initial margin requirement is $11,475 per contract...each contract represents 100oz of Gold. The new maintenance margin is $8,500.

Margin applies equally to buyers (longs) and sellers (shorts). Every trader opening a position to buy, or sell has to meet sepcific margin requirements.

Commodities futures like Gold, Silver, wheat, coffee etc, are mark to market contracts. The term 'mark to market' means that at the end of each trading session all open positions are squared & balanced by the clearing house. This is where maintenance margins come into play. For sake of discussion, if you were long one new Gold contract (100oz) @ $1600 this morning and Gold closed down $100 on the session, your account would automatically be debited $10,000 and a counterparty's account would be credited $10,000. Your initial margin deposit of $11,475 minus your $10,000 loss in equity value leaves you with an account balance of $1,475, or, $7,025 short of the new $8,500 maintenance requirement. At this point you will probably receive a 'margin call' from your broker asking you to deposit an additional $7,025 into your account in order to stay in the trade. Here, as a small speculator you can either refund your account hoping that the market turns in your favor by contract expiration, or close-out the position and take your losses.

*This is a simplified description of exchange mechanics which doesn't attempt to address the CMEs systemic abuse of margin hikes to stifle rallies and damage investor sentiment. Nor does it address the related issue of connected, Fed-agent bullion banks front-running CME margin hike announcements on privileged information leaks.*



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