Bank of Canada maintains gold sales at record levels

Gold sales by the Bank of Canada in 1991 were almost 1.8 million oz., the highest level since the program was initiated in 1980 and 462,000 oz. more than 1990 sales.

Gold sales will continue at a rate of about 250,000 oz. per month, according to a spokesman at the federal government’s ministry of finance. “Sales are up a little from the first part of last year, but we are maintaining a steady pace so as not to disrupt markets,” he said. In all, the bank disposed of 1,798,000 oz. last year. The bullion is sold to Canadian and American dealers, making the Bank of Canada the largest seller of gold in North America. Proceeds from the sales go into the federal government’s exchange account.

Gold now represents approximately 25% of Ottawa’s reserve holdings, which also include foreign currencies (largely US dollars) and bonds. At the end of March, 1992, the federal government held 12.3 million oz. of gold. This stockpile has been shrinking steadily; 12 years ago it stood at 16 million oz. Most of the bullion was purchased more than 30 years ago when the gold price was US$35 per oz.

There is no “ideal” gold reserve level, according to the ministry of finance. The total amount of metal to be sold is not a figure the spokesman was willing to discuss.