Detremmerie added that there were two important consequences. One is that these emerging nations are not likely to cause a paradigm shift in the global gold-as-reserve picture over the longer term. Whereas 200 tonnes may sound as quite a lot, it is actually limited in terms of global official gold holdings, which are estimated to be around 30,000 tonnes. A shift in the whole picture is also unlikely due to the second reason, being that mature central banks - and thereby currently the largest official holders of gold - are likely not to significantly increase their reserve exposure to gold, he said.

Currently, most of the world's official gold holdings are situated in the U.S. (approx 8,133 tonnes), the Euro-zone (10,800 tonnes) and the IMF (roughly 3,000 tonnes, after subtracting the recent 200 tonnes sale to India's Reserve Bank.). Certainly, the U.S. and Europe have been hit the hardest by the financial crisis. Both are left with budget imbalances for many years to come following the financial aid to the ailing economy, Detremmerie added.

Therefore, it seems viable that some of Europe's central banks - which can act separately on gold sales under the limitations of the Central Bank Gold Agreement -, are going to look for opportunities to fill the gaps. There's good evidence that central banks are well aware that gold could be nearing a cyclical high, and that it could be profitable to unload some of it, as it is what any sensible investor wants to do; buy at the bottom, sell at the top. Even for central banks, gold implies a wanted profit-post on balance sheets.

As such, this puts things in perspective. Whereas our firm doesn't believe that spectacular central bank sales are going to hit the market anytime soon, we're convinced that these mature central banks are not interested in buying gold at current prices. Sales under the CBGA this year could as such come in on higher levels than last year if you follow this line of thinking, Detremmerie concluded.

In the last year of the previous 5-year CBGA, which ended in September, signatories to the pact only sold 155 tonnes of the allowed 500 tonnes quota. For the next five years, the total annual cap has been lowered to 400 tonnes, bringing the total to 2,000 tonnes over the entire timespan."

To the above, with which we completely agree by the way, you can add the re-statement of the opinion we posted last week, in the wake of the media frenzy that followed in the wake of the Indian central bank's purchase:

" Will they? Won't they? Does it really matter? Central bank policies and active and overt or covert foreign exchange reserve management will continue - regardless of the price of gold, and/or the value of the US dollar. Banks whose management considers holdings to be 'underweight' will buy, whilst those whose policy makers consider holdings of gold to be beyond previously established targets, or actually need money for a particularly rainy day, will sell.

Was is 'heresy' for Russia to consider selling 20-50 of its recently accumulated tonnes? No more than Switzerland's lightening up on its holding by a lot more than that, in the not too distant past. Is it 'silly' for the US to value its 8.000+ gold tonnes at $42.20 per ounce? No more than Canada's 3 tonne holding, that is smaller than that held by Bangladesh, or the Hon. Ron Paul's futile calls for a return to the gold standard, or the abolition of the Fed.

As stated in these columns many times before, the vast majority of those central banks which wanted to offload their gold holdings, -for whatever reason- have already done so. Wise or unwise, ill-timed, or not, symbolic, or not.

Way too much is being read into such actions, or the lack thereof, even though ALL the gold in the world (163.000 tonnes of it) adds up to 0.6% of total global wealth, and that it is not about to make a comeback as the de facto 'currency' of the realm or peg among the world's central banks.

Can adjustments over the next three decades take place that take away some of the dollar's dominance and bump up gold's position in the hierarchy take place? Why, sure they can. Will the be tectonic shifts that completely reverse the status quo? Nope.

The gold standard as we knew it, is history, let us face that inescapable fact. And that, is not just Nobel laureate Paul Krugman's take on the matter. None of this, however, should preclude you, and/or any other investor from making it your own 'standard' if that is your preference.

For the majority of individuals, the same exact average that the computation of the official sector's average holdings amounts to (roughly 10%) is a perfectly adequate level. Notwithstanding Portugal's 90% or Canada's practically zero gold allocation levels. As we said, these are matters of personal preference, and not standards by which to judge other countries, or individuals' allocation decisions.

Thus, there is very little to be gained by constantly pointing to this sale or that purchase as a harbinger of...anything, or a 'vote' on anything. You may rest assured that no change in central bank reserve management policies would come about, even given $5,000 per ounce gold. It simply does not matter."

Jon Nadler is Senior Analyst, Kitco Metals Inc.