Central bank sales are again getting the blame for gold’s failure to climb higher, and perhaps rightfully so. Central banks have unloaded in the last few weeks, but Jon Nones, writing for resouceinvestor.com, says that increased central bank gold sales are no reason for concern.
As Nones points out, central bank gold sales are they are well within the limits agreed to by the signatory European central banks that comprise the Central Bank Gold Agreement, agreed to in 2004.
What makes the sales newsworthy is that a large number of ounces were dumped in the last few weeks, putting downward pressure on the price of gold. There is no way of knowing if the sales were coordinated to push prices lower, but that is certainly within the ream of possibility.
Another bit of information to be gleaned from the article: investors hold more gold than the world’s central banks. It seems that the value of gold has not been lost in this world of paper money in which we live.