Spanish gold sales make market bull-fight - Wednesday 19th September 2007

It is ironic that the virile bull is a symbol of Spain – considerable gold sales from the country's central bank have only been greeted with bullishness from bullion investors.

With the yearly quota for central bank gold sales nearly reaching expiry, the Banco de Espana (BDE) has provided the rapid offloading of the precious metal expected by many, but individuals and companies looking to buy gold have not panicked.

Concluding its gold-selling campaign, BDE sales in recent weeks have brought the two-monthly total to 80 tons and the yearly load to around 165 tons, valuing an estimated €13.2 billion ($17.7 billion).

It appears, however, that with current bullish sentiment among bullion investors, not even the potential impact of this influx on prices can fluster the gold market, with many buyers reported to be running with the news.

Signatories of the Central Bank Gold Agreement of 2004 have now tabled total gold sales of about 345 tonnes for the year with just one week remaining for those wishing to fulfill the quota amount.

Spain has been the biggest seller, reported to be anxious to cover a soaring trade deficit, with the Banque de France and the European Central Bank following behind.

News of the Spanish sales came amid stock market enthusiasm at US interest rate cuts, seeing gold futures hit a 27-year high and leaving gold bullion investors more bullish than ever.
Goldbug, 19 Sep '07

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