56. What does the Gold Accord entail?
The gold agreement is an international agreement that deals with the sale of gold. The gold agreement is an agreement between several central European banks. The member central banks are: the DNB, the central banks of the other euro countries, Switzerland, Sweden and the European Central Bank. The agreement made is that all these banks are not allowed to sell more than 400 tons of gold per year. The gold agreement is valid for five years and was last agreed in 2009. Therefore, this agreement is valid until 2014
The first gold agreement dates back to 1999. At the time, it was rumored that the central banks wanted to sell a lot of gold. This caused a drop in the price of gold. To restore calm in the gold market, fifteen European central banks concluded a gold agreement. The European central banks agreed that they would sell an average of a maximum of 400 tonnes of gold per year. The gold agreement achieved what it set out to do and brought some calm back to the gold market. Partly because of this, the gold price remained fairly stable in those first five years.
The European central banks extended the gold agreement in 2004 for a further period of five years. At that time, the European central banks agreed to sell a maximum of 500 tonnes of gold per year. In 2009, the third gold agreement was signed. This applied to the period 2009 to 2014.
In 2011, the European central banks bought more gold than they sold: 0.8 tonnes to be exact. This is very remarkable, because since 1999 the European central banks have been the big gold sellers with an average of 400 tons per year that were sold. The central banks that have made large gold purchases in the past year are the central banks of Estonia and Malta.
