By Ovid Abrams
Tuesday, March 10, 2009
NEW YORK — Central banks, which have been net sellers of gold in recent years, were net buyers of an estimated 1.1 million ounces in January, according to the latest Market Alert by the CPM Group, the New York-based metals consultancy.
The world’s central banks were both buyers and sellers, but the quantity bought outstripped what was sold.
Ecuador is estimated to have purchased 920,000 ounces of gold in January, Venezuela bought 240,000 ounces, and Russia purchased 130,000 ounces, after having bought 310,000 ounces in December.
“Ecuador’s government has run into severe political and economic problems, and has a dollarized economy, using the US dollar as its currency and thus not having many monetary tools, such as being able to issue money that other central banks possess,” CPM noted.
France was the largest seller of gold in January by 40,000 ounces and 10,000 ounces, respectively.
“It seems highly unlikely that such large net purchases of gold by central banks will continue,” said CPM. “However, those central banks that have been selling gold for much of the past two decades have sold most of what they wanted to sell. Others are buying small volumes and considering larger purchases, in the face of the financial crises and currency market volatility they have faced over the past year.”
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