Central banks in debt-strapped countries have a golden opportunity ahead of them, if you will excuse the pun, to help their countries' finances by selling their yellow metal holdings.
At least, that is the message that Royal Bank of Scotland's commodities chief Nick Moore has been giving in recent presentations -- and he thinks it might happen. The gist is that gold is now at a record price but banks have not come close to meeting their sales allowance for the year.
Under the Central Bank Gold Agreement there is a quota of 400 tonnes that can be sold by central banks within a 12 month period and with only about three months to go in the latest period less than 39 tonnes has been sold. At today's price that remaining 361 tonnes is worth some $14 billion.
Moore believes that euro zone central banks in particular may increase their sales because of the record price and the deteriorating fiscal positions. Furthermore, he reckons the price of gold will come down over the next 12 months as its safe-haven appeal eases and inflation expectations fade.
Among the so-called PIGS -- Portugal, Italy, Greece and Spain -- Italy is the major gold holder with qround 2450 tonnes. But Portugal has some 380 tonnes, Spain 280 and Greece 112.