The fourth year of the Central Bank Gold Agreement (CBGA) is likely to see a "significant shortfall" in terms of sales, according to a new report.
Precious metals consultancy GFMS has issued a publication examining the gold reserves held by members of the agreement and the sales made in 2007. It concludes that total sales will "almost certainly" fall short of the 500-ton limit next year.
About one-fifth of the world's mined gold bullion is currently held as reserves by central banks, although this is gradually declining as more of the yellow metal is mined and some reserves are sold - something that may have an effect on gold prices.
With Spain selling more than 240 tons of gold during the second year of the CBGA, it is now left with some 280 tons - which makes it difficult to imagine that the country will be able to carry out future sales equal to those seen in the third year, says GFMS.
Meanwhile, it is unlikely that Italy will sell off gold reserves to part-fund its budget deficit, the consultancy adds. This is due to the fact that such a sale would not be enough to fund a significant proportion of the deficit and also because the Banca d'Italia and the European Central Bank would be unlikely to agree to the sale.
GFMS goes on to note that while non-regular potential sellers such as Portugal and Belgium may sell some of their gold reserves, "their combined volume would probably be limited and insufficient to prevent a significant shortfall from the 500-ton CBGA limit".
The central banks of Malta and Cyprus, the newest members of the European Union, signed up to the CBGA earlier this month.
How best to Buy Gold today? "If there's an easier route to buying investment gold, I have not found it," says one BullionVault customer. Find out for yourself and start Investing in Gold here...