Central Bank Gold Agreement to lapse?

Posted | 28/03/2014 / Views | 2501
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After the brain explosion of Gordon Brown in the 90’s telling the market and then dumping tonnes of gold on to the market drove gold to 20 year lows, 15 European nations agreed to the CBGA to limit what could be sold in any year.  That agreement has been extended 2 times but reports now suggest they may let it lapse in September.  Whilst on face value that may look bearish for gold, analysts say it is actually good for gold prices as it won’t make central banks fear buying gold because of restrictions should they need or want to sell it.  Regardless, as central banks have been net buyers for so long now, the limits have not been even remotely neared and hence become meaningless.  If this occurs it could well ‘unshackle’ gold just as central banks could be needing it more than ever.