ECB Sold Gold

While the European Central Bank (ECB) did not provide financial details of the sale, with gold prices at around 920 dollars an ounce, the latest sales would have a value on the order of 1.15 billion dollars (870 million Euros).

Analysts said they could only speculate on what the money raised might be used for, while noting that the sales were part of a normal procedure.

Among the possibilities were funding for International Monetary Fund assistance to countries in need and compensation for losses the ECB might face in connection with the bankruptcy of US investment bank Lehman Brothers in September or the collapse of the Icelandic banking sector that followed.

ECB directors might also "think other assets are more attractive in terms of the yield of the return" than gold, which has fallen off recent peaks, Polleit recommended.

The central bank is expected to cut its key interest rate below the current all-time low of 1.50 percent on Thursday, and analysts say it could also decide to venture onto new ground -- such as the eventual purchase of corporate debt -- as it seeks ways to ease a deepening recession.

The gold sales, which were completed on Tuesday, conformed to the Central Banks' Gold Agreement of September 27 2005 that limits gold sales to 500 tonnes per year during the period between 2004 and 2009.