MOVES to sell 10 tonnes or more of Cyprus' gold bullion reserves are very different to heavy gold sales of the 1990s, according to a leading analyst.
"When the Cypriot sale goes through," says Rhona O'Connell, senior analyst at Thomson Reuters GFMS in London, "the chief issue is whether this is the thin end of the wedge.
"The soothsayers are likely to find that it is not."
As a group, says O'Connell, central banks worldwide were net sellers of gold every year between 1989 and 2009. Since then, however, the financial crisis has seen European banks suspend their sales, allowing emerging-market governments to make the official sector a net buyer overall with strong, continued purchases.
"We can continue to expect a heavy tonnage of central bank purchases this year," she writes in a special report for Reuters customers.
"Central banks are here to stay as net buyers," agrees Dominic Schnider at Swiss bank UBS's wealth management division in Singapore. "They are probably the ultra long-term investors."
Last week brought new data showing increased gold bullion reserve purchases by Turkey, Azerbaijan, Mongolia and Serbia amongst others.
Russia's central bank – which vowed in January to continue diversifying its foreign currency reserves with physical gold bullion – now ranks as the world's 7th largest gold holder, just behind China's reported holdings with 981 tonnes.