By William L. Watts, MarketWatch LONDON (MarketWatch) -- The European Central Bank, the Swiss National Bank and Sweden's Riksbank on Friday announced a new agreement to limit central-bank gold sales over the next five years. In a joint statement that was also signed by the euro-zone's 16 national central banks, the institutions agreed to limit total gold sales to 400 metric tons a year, with total sales over the five-year period capped at 2,000 metric tons. "Gold remains an important element of global monetary reserves," the central banks said. The plan takes effect on Sept. 27, immediately after the expiration of an existing five-year agreement. In a separate statement, the Swiss National Bank said it had no plans "for any further gold sales in the foreseeable future." The SNB said its gold holdings of 1,040 metric tons constitute a substantial part of its currency reserves. The European deal was seen as key before the International Monetary Fund could start selling their holdings. "The signatories recognize the intention of the IMF to sell 403 tons of gold and noted that such sales can be accommodated within the above ceilings," the central banks said. Gold futures slipped $1.40 to $961.50 an ounce in electronic action. "The news should help to underpin gold prices," said John Meyer, an analyst at the U.K. brokerage Fairfax, in a note to clients. "This combined with currency volatility, ongoing uncertainty, unexpectedly high quantitative easing and ETF gold fund popularity should help gold prices go higher."

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