Agreement With Gold

> The United Kingdom signed the first agreement, but not the second after declaring that it had no intention of selling its gold reserves. In August 2009, 19 banks renewed the agreement and committed to sell a total of 400 tonnes of gold by September 2014. The International Monetary Fund has not signed this agreement. [6] The Washington Gold Agreement was signed on September 26, 1999 in Washington, D.C. at the annual meeting of the International Monetary Fund (IMF), and U.S. Treasury Secretary Lawrence Summers and Federal Reserve Chairman Alan Greenspan were present. [1] The second version of the agreement was signed in 2004 and the agreement was renewed in 2009. The World Gold Council welcomes the decision of European central banks to agree on a new central bank gold agreement (CBGA). The agreement, the fourth of its kind, highlights an ongoing commitment by some of the world`s largest gold reserve holders to maintain the clarity and transparency that this agreement offers to gold market players. It also strongly reaffirms the importance of gold as an asset in global monetary reserves.

According to the World Gold Council, central banks bought 651 tonnes of gold last year worth nearly $30 billion, most of them in half a century. In addition to the destabilizing effect of these sales, market banks` fears about central bank intentions have led to a further decline in the price of gold. This has caused considerable pain for gold-producing countries. These included a number of developing countries, including a considerable number of countries classified as HIPCs (highly indebted poor countries). By this agreement, the signatories agreed not to put more than a maximum amount of gold on the market during the term of the contract. The aim was to stabilize the gold market by creating transparency of central bank intentions. The agreement was initially between 15 central banks, but the number of signatories has increased to 22. Since 1999, the agreement has been renewed three times, for a period of five years, and conditions have eased over time. CBGA2 also limited central banks to increasing their use of gold futures and leasing above the 1999 level of 2,100 tonnes. In the 1990s, sporadic sales by European central banks, which hold some of the world`s largest gold hordes, were often carried out behind closed doors, prices fell and the metal retained stable reserve status.

In order to clarify their intentions with regard to their gold stocks, the institutions that signed make the following statement: Gold sales under gold contracts concluded by central banks (tonnes) The last extension of the agreement took place in 2014.

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