I was doing a little research and came across this little tidbit:
Central Banks hold 32,000 tons of gold in reserve, this is little changed since the 1980s.
http://www.goldcolony.com/reports/other/worldgoldholdings.pdf#search=%22world%20gold%20holdings%22
Usually, they have policies regarding what percentage of their currency float is held in gold.
Global gold production is about 2,500 tons per year.
http://www.goldsheetlinks.com/production.htm
The gold held by central banks is worth double the 20 year average.
If Central Banks decide to lighten up on gold by just 10%, it will flood the market with an 18 month supply. There are currently strict limits on the selling of gold by major CBs to maintain price stability.
http://news.ninemsn.com.au/article.aspx?id=123588
With one month left on this year’s agreement there are 160 tons that can still be sold by the 15 participating banks (others have no limits) with another 500 tons available to sell under the agreement on September 26th.
Combine central bank selling with the lowest demand levels in 2 years and we may be heading into a collapse!
http://www.financialexpress.com/fe_full_story.php?content_id=137545
If you doubt that the CBs are motivated to crush commodity pricing, read this:
http://news.goldseek.com/GoldSeek/1156219200.php
Just a note to all you gold bugs out there not to get in too deep, let the Middle East play out for a few days and then let’s see if we can hold the 50 dma at $620 but I think we are in for a big letdown if war doesn’t break out in Iran this week.
