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FRANKFURT, Sept 29 (Reuters) - Germany's Bundesbank will hold on to the vast bulk of its gold reserves in the next 12 months, the central bank said on Monday.

The Bundesbank, which is the second-largest hoarder of gold behind the U.S. Federal Reserve, said it would sell no gold apart from 6.5 tonnes to the German finance ministry, as already agreed.

"The remaining sales quota will be offered in its entirety to other central banks taking part in the gold agreement," the Bundesbank said in response to a Reuters inquiry.

Under the terms of a five-year deal between 15 European central banks, the Bundesbank can sell 120 tonnes of gold a year but has consistently passed on most of its quota to other institutions and sold only enough bullion to mint coins.

The Bundesbank holds 3,400 tonnes of gold, worth about $95 billion at today's prices.

Gold was trading around $873 an ounce on Monday and has been helped by investors seeking a safe haven from market turbulence, although prices remain short of the lifetime high of $1,030.80 an ounce hit in March.

The final year of the agreement began on Sept. 27. In the fourth year, central banks were estimated to have sold about 320 tonnes of gold, well short of the 500-tonne annual limit.

The Bundesbank has refused to sell down its reserves, not wanting to hand the German government a budget windfall. Keywords: BUNDESBANK/GOLD

tf.TFN-Europe_newsdesk@thomsonreuters.com

cmr

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