European central banks renew gold agreement: ECB

FRANKFURT, Aug 7, 2009 (AFP) - A group of 19 European central banks announced on Friday they would cap gold sales at 2,000 tonnes over the next five years and stressed the importance of gold to the international monetary system.

In a joint statement, the central banks of the 16 eurozone nations, the European Central Bank and the central banks of Switzerland and Sweden said: "Gold remains an important element of global monetary reserves."

"Annual sales will not exceed 400 tonnes and total sales over this period will not exceed 2,000 tonnes," the statement added.

The new five-year agreement replaces a similar pact between central banks that expires on September 27, 2009.

The previous deal, agreed in March 2004, committed the central banks to sell no more than 500 tonnes per year and no more than 2,500 tonnes in the five-year period.

The deal before that, in 1999, was seen as a major factor in contributing to a revival in the gold price in the early part of the decade.

The announcement in 1999 was also a landmark because it is exceptional for central banks to make such statements of intent on a matter of such sensitivity to the monetary system.

Source: AFP

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