Gold's recent upturn may have been capped by central bank sales. In the week ending March 3, three Euro area central banks sold gold for 133 million Euros after they had got rid of gold for 75 million Euros a week earlier, the weekly financial statements of the ECB show.

GRAPH: Eurozone central banks have been feeding more bullion into the rising market.

This comes at a time when gold production is steady at best. South Africa produced 296.3 tons of gold in 2005, a figure last seen in 1923. in 2004 production was 342 tons. South Africa is the biggest gold producer.
While gold shows a solid performance in 2006, silver zooms away and has been nervously oscillating between $10.10 and $10.20 after reaching $10.30 last week. The upcoming silver ETF solidly underpins silver below $10. Buying the lows can become very rewarding.