I´m worried about governments selling their gold to kick the can down the road for a while

[swissaustrian]

So we see all this talk about using the gold reserves of several European countries to fund the numerous bailouts. Right now, everyone is denying such plans. We have seen this before. First they deny, then they argue, finally they act. I expect the same thing to happen with regards to gold sales. It´s all about kicking the can down the road for a few more months. Gold is the best asset governments have. They could sell it eventually.
Now: Why should this worry me or any other gold investor for that matter?
My answer: If selling gold reserves gets fancy, we could have quite massive downside moves in gold. I mean, Euro countries hold more than 10000 tonnes of gold. That´s a lot. Even if creditor nations (and private investors) buy it all, prices could fall significantly for a while. So maybe one needs some patience to see the real endgame for fiat vs. gold.

[ctiger2]

No worries, Govts are NET buyers of Gold. Any Gold that comes into the market will be purchased no problem. IIRC China needs 8000 tons.

[Seraphim]

Good. Might give us an extra 3 months to buy some.

To be honest, the markets aren't dumb enough to fall for it. Pledge/sell gold and inflate the paper. Not much of solution. If this happens it may mean a solid dip for a few months, but it just means the rocket launches harder later on.

[Seraphim]

This. Governments are buying...this is a dog and pony show.

No worries, Govts are NET buyers of Gold. Any Gold that comes into the market will be purchased no problem. IIRC China needs 8000 tons.

[swissaustrian]

No worries, Govts are NET buyers of Gold. Any Gold that comes into the market will be purchased no problem. IIRC China needs 8000 tons.

Sure in the long run this doesn´t make a difference. But for a few months, this could have quite a massive impact...

[Bern]

Europe doesn't dare sell their gold to Russia, India and China. Gold is the currency of central banks and it always has been. I've been tracking news stories about central bank gold buying here FYI:

http://www.pmbug.com/forum/f2/centra...ying-gold-114/

[Acala]

Besides, we WANT gold in circulation, not in Central Bank vaults. For those of you who own gold personally, the biggest upside in exchange value comes from re-monetization and that will be promoted by putting gold into circulation now.

[swissaustrian]

Europe doesn't dare sell their gold to Russia, India and China. Gold is the currency of central banks and it always has been. I've been tracking news stories about central bank gold buying here FYI:

http://www.pmbug.com/forum/f2/centra...ying-gold-114/

Wait until they have no other choice but selling. The "independence" of central banks from governments will mean nothing. Politicians will finally sell. Just like they did over here in Switzerland. And we didn´t even need to sell.

[Seraphim]

I doubt any big government will sell. A few small ones might be coerced into doing so by the big dogs, but I doubt any serious gold selling will take place by governments until a new global financial system is ushered in.

Unless, of course, Gordon Brown stages a coup d'etat in England.

Wait until they have no other choice but selling. The "independence" of central banks from governments will mean nothing. Politicians will finally sell. Just like they did over here in Switzerland. And we didn´t even need to sell.

[Bern]

Wait until they have no other choice but selling. ...

I think there will be war before countries give away their treasure.