The World’s Biggest Gold Investors are on a Buying Spree

Date: 2019-09-23 23:45:11


Download Mike’s best-selling book for free here: It happened with little fanfare, with virtually no reporting by the mainstream press. But this development signaled that one of the biggest gold-buying entities sees a growing need to own gold right now.

Not only does it mean they will continue to buy, but their buying lends long-term support to the gold price.

Here’s what’s happening and how it impacts the gold market going forward…

Bye-Bye, Central Bank Gold Agreement

A total of 21 central banks are part of the Central Bank Gold Agreement (CBGA), mostly in Europe. When it first started in 1999, its purpose was to “balance” conditions in the gold market by, among other things, coordinating gold sales among the various signatory banks.

Through 1999, gold had largely been in a bear market for almost two decades, and central banks were active sellers during the time. So the idea behind the agreement was to keep ongoing sales from spinning out of control and pushing the price down so much that it hurt the value of each bank’s remaining reserves. So a limit was set on both total sales and individual sales by member countries.

This agreement was renewed three times—in 2004, 2009 and 2014. With each new agreement, the caps on sales became less stringent.

The fourth renewal expires on September 26 this year, and thus a new one had to be signed by then. But we now know that the CBGA participating banks jointly decided NOT to renew the Agreement.

Why? For starters, they just weren’t selling gold any longer. Here’s the amount of gold sales from the participating banks during the life of the CBGA….
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