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Germany Sells Gold in June According to IMF Data

July 25, 2012 – The central bank in Germany sold 24,000 troy ounces of gold in June as other countries, including Turkey and Mexico, lowered their official holdings slightly according to figures released from the International Monetary Fund on Wednesday.

The Bundesbank, Germany’s central bank, lowered reserves to 109.170 million ounces in June from 109.194. This is the first time the Bundesbank has sold gold since October, according to the data.

While the central bank was not available for comment, it has said in the previous year it sporadically sells gold to the nation’s Ministry of Finance to mint commemorative coins.

Turkey’s reserves held in gold decreased by 24,000 ounces in June to register at 7.852 million ounces. Mexico’s central bank sold 3,000 ounces to bring Mexico’s official reserves to 4.030 million ounces.

Meanwhile, Guatemala is reported to have bought 6,000 ounces to bring its holdings to 227,000 ounces while Greece, the beleaguered European nation bought 1,000 ounces, bringing its reserves to 3.593 million ounces.

Data for the central banks traditionally most active in the gold market, including Russia, Kazakhstan, and Tajikistan, is not yet available.

The Central Bank of Russia, one of the few banks that publish the changes in its holdings, reported last week that it increased its reserves to 29.5 million ounces from 29.3 million ounces in the last month.

In a reaction to the sovereign debt crisis and its influence on the US dollar and the euro in currency markets, central banks in emerging economies have been net buyers of gold this year, making the weakness the gold price in the second quarter even more irrational.

The purchases in the official sector are nonetheless seen as supporting the price of gold. Central bank purchases absorb supply and boost market sentiment, though reports of central bank holdings and purchases reach market typically at the end of the quarter in which they occur. The absorption of supply is immediate.

The International Monetary Fund’s June figures so far show increased selling of gold in metals markets but the selling of gold during the quarter is a drop in the bucket compared to net purchases which clocked in at more than 80 metric tons during the first quarter according to analysts.

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