vente d'or des banques centrales signataires du washington agreement / WAG1, 5ème exercice

vente d'or des banques centrales signataires du washington agreement

le 1er accord entre banques centrales européennes pour vendre leurs stocks d'or a été signé en 1999 pour une durée de 5 ans
(il a été ensuite reconduit pour les 5 années suivantes )
et c'est l'objet du rapport de Ed Wener qui porte donc sur les ventes d'or des banques centrales pour la période sept 2004 / sept 2005 , c'est à dire le dernier exercice de WAG1

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Ed Wener - A Report on WAG2... source GATA


I’ve been trying to track European Gold sales to see whether they will be able to stay within their self imposed limit of 500 tonnes per year. John Brimelow has been doing a good job of reporting weekly changes in your daily Midas. Today for example he reported that Spain has sold 7.1 tonnes. This is true but after that sale in May they sold a further 420,000 oz (13 tonnes) in June.

This information (and more) is available at http://www.bde.es/buscar-bin/buscar

Like John, I believe this Spanish selling is very important. Spain hasn’t sold any gold (if we believe the stats) since 1999. The Swiss have stopped selling as have the Germans (or so it seems). The baton had to be passed on and it looks like Spain, France, Portugal and the ECB itself are now facing the burden of filling the quota.

The signatories to the 2nd Washington Agreement tried to send two messages to the Gold market. On the one hand, the signatories made it be known that they are Gold rich with the largest stocks of monetary gold in the world. The hidden message being that it’s dangerous to take them on. Go long Gold and we’ll crush you.

And they promise “Gold will remain an important element of global monetary reserves.”

On the other hand they agreed to limit their sales to 500 tonnes per year to Sept 26th 2009. Why sell 20% of your reserves if they are an “important element”? The message here is that Gold does not provide an adequate income. The paper currencies offer a better return. Buy Government Bonds instead of Gold.

I believe that the first year limit has now been reached. With two months to go until the next 500 tonnes quota kicks in. This in no way prevents them from selling more, Washington Agreement notwithstanding. They’ll do whatever they can to control the Gold Price.

The latest IMF update dated June 2005 of Eurosystem Holdings only reports data to the end of April 2005. I have added the latest numbers to the table from my earlier report:



We see that by the end of April the Central Banks sold either 404 tonnes or 414 tonnes. The IMF total is 10 tonnes less than the total obtained by adding the individual bank figures. In addition to these sales Note 6 in the IMF report states:

“Up to June 17th a further 57.2 tonnes had been recorded as sold by Eurosystem central banks. Germany sold 3.4 tonnes in May (for the issue of coins); the remaining 53.8 tonnes had not yet been identified at the time this table was prepared.”

Since then, John Brimelow has been updating the ECB Gold sales by converting into Gold ounces the changes announced by the ECB to their Gold Assets (which include Gold and Gold receivables). The ECB does not record these changes in Gold ounces but in Euros. They may in fact be disposing of more Gold by leasing some of it. This leased Gold would still be included as a Gold Asset.

However, lets assume Brimelow’s figures are correct. Over the past four weeks he has reported sales of 31 tonnes, 6.54 tonnes, 6.62 tonnes and 15.07 tonnes for a total of 59.2 tonnes.

To summarize:

We have the IMF report to the end of April showing 404 (or 414) tonnes sold. To that we add 57.2 tonnes (up to June 17th) and the 59.2 tonnes Brimelow reports to give us a total Gold sold of 520.4 (or 530.4) tonnes.

Brimelow who has been tracking the total Gold sold comes up with a lower total, just below the limit. This just confirms how difficult it is to keep track of what the Central Banks are doing. In any case, we both agree that the final two months of this WA2 year will be interesting to watch. They are about to reach or have already exceeded their limit.

The June 2005 IMF report contains other relevant data. In addition to the Eurosystem sales there were two other big CB Gold sales between the April report and the June report. The Philippines sold 25.1 tonnes and the BIS sold 20.7 tonnes.




The Philippines has now sold 57.6 tonnes and the BIS 31.8 tonnes since WA2 began Sept 27, 2004. I think the BIS sale, along with the unexpected ECB sales (and what about the small USA sale?) prove that we have breached their inner defenses.

All this brings total reported NON Eurosystem Central Bank Sales to almost 100 tonnes for the first nine months of the 2nd Washington Agreement. Add to that the approx. 500 tonnes the Eurosystem sold and we get 600 tonnes of reported Official Sector sales. This works out to a reported annual rate of 750 to 800 tonnes. I stress the word “reported” because there is strong circumstantial evidence that the flow is much larger if leased gold is included.

There can no doubt that it has been official sector selling at critical technical levels that has stopped the Gold price from rising even further. During the first five year Washington Agreement, the Eurosystem banks sold 2000 tonnes at the rate of 33.3 tonnes per month. Over the past nine months this rate has accelerated to 55 tonnes per month. If we include all Central Banks the flow is 66.6 tonnes per month. It seems the moment of truth has arrived. Those wanting to prevent Gold’s rise will need to sell 130 tonnes over the final two months until the 2nd year of WA2 begins on Sept 27th 2005.

Bill, in your commentary today you wrote:

“John Brimelow has talked for a couple of weeks about possible gold fireworks in August. I’m with him. The liquidation should have run its course (it's been very typical so far) and the interest in the precious metals is abysmal with few investors paying attention. The Gold Cartel has bored them out of the market. Therefore, the set-up for gold and silver to move sharply higher is nearly perfect.”

I believe you’re right about the setup. But don’t count the bad guys out. This Washington Agreement is one gigantic smokescreen. They don’t care about the Gold in their vaults.

Their problem is NEGATIVE INTEREST RATES. If Gold gets away from them watch out. They will lose control of interest rates. Remember that Volcker quote:

”Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake.”

Why was this a mistake? In my piece on Volcker, I wrote:

“GOLD FORCED the Fed to act, to raise interest rates. Or more precisely GOLD TOOK the Fed’s control of interest rates away. Paul Volcker surrendered to Gold!”

These guys are truly desperate. With real US inflation currently north of 6%, interest rates should be more than double what they currently are. Why hold Dollars or Euros or Yen all yielding 3.5% or less? Why? Because Gold is too risky! A rising Gold price, especially if it looks like the Central Banks aren’t reacting, would mean that all Central Banks would have to raise interest rates to compensate for inflation. Once again we would see a Fed rate in the double digits. And that’s their REAL PROBLEM. They must keep Gold under control or they surrender.

Cheers from Auckland. Ed Wener (more to follow)

ed.na@xtra.co.nz

un must read ça ... en effet et pour ne parler que du très court terme , tout concorde pour penser que les banques centrales seront obligées de lever le pied sur les ventes d'or, pour les 2 prochains mois.

et avec le boum qu'il y a sur la demande physique d'or + la saison des mariages en inde ... 2 mois sans pouvoir vendre aucun or, c'est très long !

time will tell

marché de l'or / décryptage / vente d'or des banques centrales européennes

Eurosystem Sales by Ed Wener : ou "comment fait Caballas

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The bombing of the Gold market over the past few days was well planned as usual. First they let the Gold price run a bit, accumulating Gold along the way. They buy Gold shares too. This strategy attracts new buyers, not aware that they are entering a Bizarre World where normal market conditions do not apply.



Then, out of the blue, for no apparent reason, they attack. The real reason for the attack is to frustrate market participants. Hurt them financially. Discourage them from owning Gold or Gold shares. The attack is coordinated and sustained. They use the Gold accumulated in the run up supplemented with Eurosystem Gold as the table below illustrates. This Table is derived from the weekly financial report available at: http://www.ecb.int/press/pr/wfs/2005/html/fs051101.en.html



This Table begins with the second year of the second Washington Agreement (WAG2). The first figure of 149,882 million Euros is the total Eurosystem holding of Gold and Gold receivables. It works out to 11,858.4 tonnes (using 32,151 oz per tonnes and a Gold price of €393.124 per oz).





This attack on Gold is highly profitable for those on the inside. They make money knowing that Gold will go up and then they sell and short Gold/Gold shares making money on the way down. The HUI index went up to a high of approx 250 then dropped signaling that Gold was about to be attacked.



Let’s go back to our table for it tells us this attack is over. WAG2 limits Eurosystem sales to 500 tonnes per year. In the first month of year 2 they have already sold at least 60 tonnes which works out to 720 tonnes annually. I say “at least” because Eurosystem holdings include Gold Receivables. They may have leased or swapped more than 60 tonnes during the month. In other words their vaults do not hold 11858 tonnes of Gold but rather a combination of Gold Bullion and Paper Receivables of dubious value. The breakdown of this total into their component parts is the greatest secret in the financial markets. If we knew the total Gold Receivables we could work out the total Gold Bullion sold over the past decade and from that calculate how much longer this charade can go on.



In any case, I believe Gold market participants are learning from past experience. Buyers are becoming less enthusiastic with each successive run up. This is most noticeable when looking at the Gold shares. Experienced buyers are now taking profits as they see the shares stall. So in the current run up to US$480 the shares were unable to better their highs of 12 months ago. But too this is a dangerous game. Selling your Gold and Gold shares because the market is rigged, because breaking out to new highs does not mean further gains but immediate pain means you are being trained to react. Remember, they don’t want you to own Gold or Gold shares. They want you to hold fiat currencies. Pain, in the form of financial losses, is applied whenever you get too enthusiastic.



So whereas the old rule was to buy on a breakout, the new rule is to sell. Take “profits”. This is the Bizarre World of Gold. So you take “profits” but you’ve given up your seat in the Gold market. You hold fiat paper. You are being trained to hold fiat paper. No one is going to tell you when the game is up. And this game is for keeps. No second chances. As long as they are willing to sell down their Gold stocks it can go on. Unless of course someone else says “I bid $1000 per ounce”. Unlimited quantities required. Preposterous idea? Maybe, but at $1000 per oz all the Eurosystem Gold (including those dubious Receivables) would only be worth €$300 Billion. Or more simply there is only one ounce of Gold for every European.



Cheers from Auckland, Ed Wener
ed.na@xtra.co.nz