Goldman Sachs in huge bullion buy from cash-strapped Ecuador

New York investment bank Goldman Sachs has picked up 466,000 ounces of gold from cash-strapped Ecuador.

According to the South American nation's central bank, Goldman acquired 1,165 gold bars, worth roughly $580 million at today's ruling price.

Ecuador under socialist President Rafael Correa is seeking sources of cash "after borrowing more than $11 billion from China since defaulting on $3.2 billion of foreign debt five years ago," reports Bloomberg.

Ecuador’s is the only country on the continent using the US dollar as currency and the central bank explained it "invested" the gold with Goldman in exchange for more liquid assets.

The country will get the gold back within three years and the central bank expects to turn a profit of as much as $20 million on the transaction without explaining how.

George Gero, a vice president and precious-metals strategist in New York at RBC Capital Markets told Bloomberg: "It’s really a puzzling transaction. The idea that there was a large sale and you don’t know when it will come out into the market is probably pressuring prices."

The price of gold fell 3% last week and on Tuesday continued to hover near four-month lows of $1,245 an ounce.

Gold remains some 4% to the upside for 2014 but is down $135 from highs reached mid-March as the rally on the back of safe haven demand and bargain hunting loses steam.