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Debt-Free And Sound Money Movement :: General :: GOLD/SILVER ISSUES AND GATA :: Reuters notes GATA statement on gold price capping
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think4me
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Reuters notes GATA statement on gold price capping
« Thread Started on Jul 8, 2005, 2:25pm »
[GATA] Reuters notes GATA statement on gold price capping by European central banks


Europe banks not suppressing gold prices -- traders

From Reuters
Thursday, July 7, 2005

http://today.reuters.com/news/newsArticl....ti-Trust+Action

NEW YORK -- Traders and analysts on Thursday dismissed a gold group's
claim that European central banks suppressed gold prices on moves
above $440 an ounce, saying instead the market routinely sees selling
above that level as it is at the top of a recent trading range.

According to a statement by the Gold Anti-Trust Action Committee on
Thursday, the precious metal has been capped at $440 since last
December by repeated selling of gold reserves by European central
banks as well as the ECB itself.

The ECB last week sold 360 million euros in gold, or 31 tonnes, at
the bank's new book value for the metal, said GATA, citing research
by gold analyst John Brimelow of Aegis Capital in New York.

This amount was matched only by the sale of 47 tonnes at the end of
March and a 31.9-tonne sale last December, GATA quoted Brimelow as
saying.

"An indisputable pattern has now developed for the ECB to step
forward as a massive seller when gold approaches the $440s," Brimelow
said.

But some market-watchers disputed the idea of a concerted effort by
European central banks to keep gold prices below $440. They said
rallies above that mark this year were failing mainly due to the
presence of major technical resistance.

"I don't think you can really point to that as something that's
suppressing the marketplace," Paul McLeod, vice president of precious
metals at Commerzbank in New York, said, referring to central bank
sales.

"They are operating within their quotas and the market very much
knows their volume allotment over the course of a year."

McLeod added: "If you're holding a commodity that's naturally
volatile and you're seeing prices up there, you're in the top part of
a range and you probably want to sell more there than you do at $420."

A trader at a precious metals refiner said profit taking by
investment funds has tended to cap rallies above $440 to $445 this
year.

"The (fund) long positions just get too big when we get to this level
and there's just no buying left," the trader said. "The buying
happens if you get closer to $420."

Spot gold was quoted at $423.15/3.90 on Thursday afternoon, after an
earlier safe-haven rally on news of four deadly explosions across
London's transport network.

Gold in 2005 has been unable to regain the 16-year peak above $455 an
ounce reached last December as the U.S. dollar was stuck in a three-
year-old decline.

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« Last Edit: Jul 8, 2005, 2:27pm by think4me »Link to Post - Back to Top  IP: Logged
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Re: Reuters notes GATA statement on gold price cap
« Reply #1 on Jul 8, 2005, 2:26pm »
[GATA] European central bank gold sales repeatedly cap price around $440


11:14a ET Thursday, July 7, 2005

Dear Friend of GATA and Gold:

Here's a press release GATA distributed internationally
today to document the gold price-capping efforts of
European central banks. Please copy it to news
organizations in your area.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

European Central Bank Gold Sales
Repeatedly Cap Price Around $440

GATA press release
via Business Wire
Thursday, July 7, 2005

The price of gold has been capped at $440 per ounce since last
December by repeated selling of gold reserves by European central
banks and the European Central Bank itself, the Gold Anti-Trust
Action Committee disclosed today.

GATA's finding was based on the research of its consultant, gold
market expert John Brimelow of Aegis Capital in New York.

"The ECB reported on Wednesday a sale of 360 million euros in gold
last week, 996,592 ounces at the bank's new book value for gold, or
31 tonnes," Brimelow said today. "This is a huge amount, matched only
by the sale of 47 tonnes announced at the end of March (but reported
only in May) and a 31.9-tonnes sale last December last year."

Each of these sales corresponded with gold's penetration of the $440
price level, as can been seen at the one-year gold price chart here:

http://www.kitco.com

"An indisputable pattern has now developed for the ECB to step
forward as a massive seller when gold approaches the $440s," Brimelow
said. "Curiously, the euro price of gold does not seem to be as
sensitive an issue with the ECB."

The massive selling of gold in recent months by European central
banks, Brimelow added, suggests that they will be obliged to suspend
sales in September if they are to keep within the volume limits they
set for themselves in the renewal of the Washington Agreement on
Gold.

The latest ECB gold sales were shown on the bank's consolidated
financial report for July 1, posted this week on the Internet here:

http://www.ecb.de/press/pr/wfs/2005/html/fs050706.en.html

Brimelow's research echoed comments made Tuesday by John Embry, chief
investment strategist for Sprott Asset Management of Toronto, during
an interview with Report on Business Television in Canada. Embry, who
will speak at GATA's Gold Rush 21 conference in Dawson City, Yukon
Territory, Canada, from August 7 to 9, likened the current
intervention of central banks against the gold price to their
coordinated selling of gold in the 1960s via what was called the
London Gold Pool. Embry noted that market demand for bullion
eventually overwhelmed central bank supplies then and he predicted a
similar outcome soon.

GATA Chairman Bill Murphy today repeated the organization's belief
that, because of their sales and leasing of gold and their false
accounting of leased gold as gold still in the vault, central banks
possess only a fraction of the gold they claim to have. Murphy added
that the purpose of central bank gold sales and leasing is not really
what is represented by the banks -- to raise money from a "dead
asset" -- but rather to manipulate the currency and precious metals
markets and deceive them about reckless government monetary policies.

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