18 September 1997
More on Official Sector Sales
The following commentary on recent reports of official sector
sales has been prepared by the Council's Public Policy Centre:
On Friday 12 September, Gold Fields Mineral Services (GFMS) presented
their statistics for the first half of 1997. The following day, the Financial
Times (FT) ran a story saying that "another big central bank
sale of gold - of about 200 tonnes - will be announced soon".
The GFMS data show net official sales of 220 tonnes in the first half
of 1997, consisting of gross sales of 493 (including 167 Australian) and
gross purchases of 273. With reference to the 200 tonnes mentioned in
the first paragraph, what the GFMS press release actually said was: "based
on strong evidence from a number of quarters, a provisional estimate of
200 tonnes of so-far undisclosed sales, probably of European origin, is
included in the 220 tonne total".
Several points are worth making on the above:
- The word used is "sales" and not "sale". There
is therefore a possibility that more than one seller was involved.
- The sales have already happened. There may or may not be an announcement,
as suggested in the FT, but GFMS's figures for the first half of 1997
sales include the 200 tonnes in question.
- They should therefore already be in the price, though further effects
could potentially be felt if the name of the seller(s) or the reason(s)
for the sale(s) were unexpected.
- The story can in fact be read as mildly bullish. The previously unknown
sales will undoubtedly have been a factor in keeping the price down.
That it did not react more adversely, however, demonstrates some welcome
resilience.
- Even though, in volume terms, there were net sales from official sources
in the first half, it is worth pointing out that, by country, there
were as many official purchasers (17) as sellers.
|