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Stop Them Before They Sell Again
September 30, 2010



The Bank of England has the dubious honor of selling off the bulk of its gold holdings just as the market for bullion was making a bottom after 20 years where its primary direction had been lower after setting a peak in 1980.

Its contention at the time was it could get much more income on its reserves if they were in paper assets.

At the time, many of Europe’s central banks shared that view, but were smart enough to sign what was called the Central Bank Gold Agreement.

This was to set a ceiling on their annual sales of 500 metric tons of the precious metal reserves in order to prevent the price from being pushed down further.

Well, that part worked.

Hardly had the ink dried on the agreement in 1999, than gold turned around. (Actually it was in 2001 when the market finally found its bottom between $250 and $260 a troy ounce.)

This week the World Gold Council says participants in the current agreement have sold almost no gold in the past year. The quantity of sales fell by 96 percent to 6.2 tons.

Now the conventional central bank view of gold has either changed or it looks so indefensible that they are acting as if it has changed.

Which do you think it is?





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About the Author
David C. Harper has been a coin collector since 1963. He joined the Krause Publications editorial staff in 1978 and is currently editor of Numismatic News and World Coin News. He also edits two books annually, North American Coins & Prices and Coin Digest. He is the author of the Class of '63 column that runs each week in Numismatic News. His first bylined numismatic article appeared in the June 1971 issue of Coins Magazine and his various Krause Publications assignments included a stint as editor of the magazine 1980-1983. Harper received a bachelor of science degree from the University of Wisconsin-Oshkosh in 1977. He had a double major of journalism and economics.

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