JOHANNESBURG, Dec. 17 (Xinhua) -- Gold sales from South African central banks, a major source of supply in recent years, have dried up, Alan Demby, executive chairman of the South African GoldCoin Exchange said on Wednesday.

Demby also pointed out that demand for gold coins and bullion now exceeded supply by a huge margin as investors were seeking a safe haven from the prospective fallout in the wake of mammoth money supply creation by the United States government.

Also, demand by exchange traded funds and physical coin investors had surged, he said.

The central bank's position, however, was particularly interesting, he noted.

Citing Hard Asset Investor's Julian Murdoch, Demby said the Central Bank Gold Agreement (or the Washington Agreement), which set limits on gold sales in 1999 to stabilize the market after the foundation of the euro, was set to run its course in 2009.

However the 2008 limits on CBGA sales (500 tons a year) were not even close to being reached.

The reality was that European central banks might simply be done offloading their excess gold reserves, Demby said.

The conclusion therefore arose that if investor demand continued, it would have to rely on other traditional sources of gold -- the mines.

This would "set the stage for continued deficits, higher prices and busy miners."

The only other possible source of gold sales would be the International Monetary Fund -- and it could only sell gold if the U.S. Congress agreed to the sale.