Central banks of Europe stop gold sales

The central banks of Europe have practically ceased sales of gold reserves, putting end to a decade’s worth of yearly disposals.

Within the eurozone all central banks are tied to the Central Bank Gold Agreement, which restricts their combined sales.

Sales of gold from the European central banks are now at their lowest since 1999. It is thought that the big issue of European sovereign debt is playing a large factor in the sales lull, as eurozone banks examine their predicament.

At the beginning of the 2000s banks would exchange gold bullion for the steady return of sovereign debt, however now both banks and investors alike are holding onto gold due to its secure status.

This news comes as the price of gold again hits a new high, rising to $1,308.90, the eighth record breaking price rise in the last two weeks, and the fact that the banks want to hold on to their reserves will only keep that price growing.

German economist Josef Kaesmeier said: “Gold is going to continue to rise for the next one to three years because it's bedlam on the global currency markets right now.”