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Cyprus has agreed to sell gold worth €400m from its reserves
Roils the precious metal markets as investors feared it could set a precedent
Cyprus has agreed to sell gold worth €400m from its reserves as a contribution to an international bailout, roiling the precious metal markets as investors feared it could set a precedent for other troubled eurozone countries.
Nicosia’s plan to dispose of most of its gold holdings would be the first such sale by a country seeking international assistance since the Asian financial crisis in 1997-98, when South Korea asked the public to donate jewellery to the central bank for the good of the nation.
“I think this could be a turning point,” said Jonathan Spall, director of precious metals at Barclays Capital. “Central bank stocks of gold which had looked to be ringfenced in the bailout process could now seemingly come in to play.”
A draft bailout document seen by the Financial Times, said: “The Cypriot authorities have committed to sell the excess amount of gold reserves owned by the Republic.”