The WAOG expires in 3 months time, so I emailed the European Central Bank to see if they knew if it was going to be renewed, and if so, what changes to it were likely. I received the following:
"We regret having to inform you that at the moment we are not in a position to provide you with more information on the topic in request."
That being the case, I guess we will have to do what we do best here: speculate.
I think there are 4 major possibilities:
1. The WAOG will not be renewed. This would be expected tocause a big drop in POG, and if they do this it will be evidence they may be party to some conspiracy to suppress the price of gold.
2. The WAOG will remain, with higher allowable sales quotas. This would be expected to have have a neutral to slightly negative affect on POG, depending on the magnitude of the quota increases.
3. The WAOG will be reaffirmed as is. This would be expected to have a slightly positive affect on POG.
4. The WAOG will be reaffirmed with more stringent quotas. This would be expected to have a positive affect on POG.
I think 1 and 4 would be extremely unlikely. My money would be on 2 if anyone were running a book on it.
If you don't know what the WAOG is, read this: http://www.reserveasset.gold.org/central_bank_agreements/
