The second Central Bank Gold Agreement

On 8th March 2004, the signatory banks announced the second Central Bank Gold Agreement. Like the first agreement, ‘CBGA2’ covered a five-year period, in this case from 27th September 2004 to 26th September 2009.

On 8th March 2004, the signatory banks announced the second Central Bank Gold Agreement. Like the first agreement, ‘CBGA2’ covered a five-year period, in this case from 27th September 2004 to 26th September 2009.

The second agreement started by reaffirming the first clause in its predecessor: “Gold will remain an important element of global monetary reserves”.

While the rest of the agreement covered similar ground to the first, there were some important differences.

The UK signed the first agreement but not the second, having previously stated that it had no plans to sell gold. Greece, which had not been a member of the Eurozone in 1999, did not sign the first Agreement but signed the second. Slovenia became a signatory to the second Agreement in December 2006, shortly before adopting the euro as its currency. Cyprus and Malta also joined CBGA2 just after they joined the euro.

In CBGA2, the maximum amount of gold that the signatories could sell over the five years was 2,500 tonnes, with an annual ceiling of 500 tonnes; an increase over the previous agreement, which permitted annual sales of 400 tonnes, up to a maximum of 2,000 tonnes over five years.

CBGA2 also limited central banks from increasing their use of futures and gold leasing above pre-1999 levels of around 2,100 tonnes.

ECB Press release – Joint statement on gold, March 8th 2004