As per our predictions last week gold slipped towards the early 290s dollars/oz last week. However, we were amply assisted by Mr. Ernst Welteke, President of Bundesbank (the central bank of Germany), whose statement about Germany's intention to off-load part of its gold resZerves spooked the market. The Bundesbank holds around 3,500mt of gold. The 1999 accord, known as the Washington Agreement caps the total gold sales at 400 mt. per year until 2004 by European Central Banks. The market is extremely cautious and any further addition to the list of Central Banks intending to actively off-load their gold reserves may make the longs extremely nervous. However, let us check out a few facts first before we firm tip our views.
Vikram Dhawan
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