Announced the biggest one-day drop in nearly 2 months, Cyprus on Wednesday was forced to sell its gold reserves, but analysts said the strong support price of other central banks buying gold metal.
Send more gold sales by other debt-ridden eurozone members such as Portugal and Greece investor concerns the Wednesday spot price of gold fell by 1.7% and attack a distance of 10-month low.
Analysts said the European Central Bank Gold Agreement (CBGA) the renewal fee interest by the emerging economies and gold sales restrictions positive factors, the floor under the market.
"Greater attention to the gold market may be potentially other distressed euro-zone countries to liquidate part of its gold reserves," said chief of HSBC precious metals analyst James Steel.
"We do not think this would be the case, however, we expect official sector remains prominent bullion buyers," Steel said.
Cyprus, one of the smallest economies in the euro zone, and sell excess gold reserves to raise about 40 billion euros to finance part of its rescue plan, Cyprus financing needs assessment prepared by the European Commission show that.
France sold 17.4 tons, since the first half of 2009, this is the first major sale of gold by the euro-zone central banks.
At current prices, gold amount of 10.36 tons of metal, 400 million euros compared to gold since the beginning of the gold exchange-traded fund (ETF) liquidation is only a fraction of the value, analysts said.
Cyprus's total gold reserves of 13.9 million tons by the end of February, according to the World Gold Council data.
Central Bank Gold Agreement
Macquarie metals analyst Matthew Turner said that it would be very bad in the gold market, if other countries such as Spain and Italy, large gold reserves into the seller, but there is good reason to believe that Cyprus is a special case.
Portugal has 382.5 tons of gold, worth about 14.76 billion euros in its reserves, at current prices, and Spain holdings stood at 2.816 million tons, valued at $ 1.08 billion.
Italy is the world's fourth largest gold holdings of 2,451.8 tonnes of gold reserves, worth 94.6 billion euros.
The third Central Bank Gold Agreement was signed in 2009 signed the country's gold sales will not exceed the upper limit of the five-year period of 400 tons a year over the collective.
The agreement covers the gold sales by the European Central Bank and the 20 European countries have adopted the euro, including Portugal, Greece and Spain around.
Cuggino $ 16 billion portfolio manager of the Permanent Portfolio Michael said plug gold sales, the emerging economic powers will remain strong buyers of gold, and should be long-term support prices.
Russia, Turkey, South Korea and other smaller but fast-growing economies have increased gold reserves, the International Monetary Fund (IMF) data show.
The central bank has been keen buyers of gold, because of the advent of the financial crisis, the acquisition of a net 532 tons of gold last year, a new high in 48 years, according to metals consultancy GFMS.
As a group, the central bank has become a buyer in 2010, in 2008, the economic crisis has highlighted the importance of gold as a hedge against currency and credit risk.
 



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