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UPDATE 1-Cbanks sold 475.75 tonnes gold in pact 3rd yr

(Adds background, Bundesbank keeps reserves, Frankfurt dateline)

ZURICH/FRANKFURT, Oct 10 (Reuters) - Central banks which signed the Central Bank Gold Agreement sold 475.75 tonnes of gold in the third year of the agreement ending September 26, said a statement released on Wednesday by the Bank for International Settlements on behalf of the signatories.

Also on Wednesday, Germany’s Bundesbank told Reuters that it will hold on to the vast bulk of its gold reserves in the next 12 months, selling only enough bullion to mint coins.

In March 2004, 15 European central banks renewed a 1999 pact to limit their sales over a five-year period to 2,500 tonnes -- with annual sales limited to 500 tonnes -- up from 2,000 tonnes in the first agreement.

Central banks and the International Monetary Fund (IMF) collectively hold 30,374 tonnes of gold in their reserves, but have been gradually reducing their holdings.

According to figures compiled by the World Gold Council, an industry-funded organisation, the signatories to the accord disposed of 497.2 tonnes during the first year and 395.8 tonnes in the second year. The Bundesbank, which is the second-largest hoarder of gold behind the U.S. Federal Reserve, said it would sell a maximum of 8 tonnes of its gold reserves to the German finance ministry for the latter’s gold coin programme.

“There are no plans for any further sales as part on the fourth annual quota of the Gold Agreement,” the Bundesbank told Reuters in a statement after a meeting of its executive board.

The remainder of the Bundesbank’s rights to sell gold under an agreement between central banks would be offered to other central banks in the agreement, the Bundesbank added.

“The Bundesbank’s remaining option to sell from the fourth year of the Gold Agreement is being offered to other Gold Agreement central banks in exchange for future options to sell,” the Bundesbank said.

Bundesbank holds 3,422.5 tonnes, worth about $80.5 billion at $732 an ounce.

Gold XAU= hit a 28-year high of $739 an ounce late last month. Prices have more than doubled in the last five years, lifting the value of gold's share of central bank reserves.

Under the terms of a 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.

The fourth year of the agreement began on Sept. 27. In the third year, central banks were estimated to have sold about 475 tonnes of gold, short of the 500-tonne annual limit.

The Bundesbank has refused to sell its reserves, not wanting to hand the German government a budget windfall.

Euro zone central banks, including the European Central Bank, held 186.2 billion euros worth of gold at the end of September.

The signatories of the agreement are Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia, Spain, Sweden, Switzerland, Greece and the European Central Bank.

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