Gold Tumbles As IMF Reaffirms Plan To Sell 191.3 Metric Tons Of Gold Over Time in Phased "On-Market" Gold Sales

Tyler Durden's picture

The IMF just announced it would resume selling the balance of its preapproved for sale gold, of which 191.3 tons remains. The sales would be in a phased manner over time to avoid disrupting the gold markets. This is not major news as this is inline with the IMF's September 2009 announcement to sell 403.3 metric tons of gold. As is well known the IMF has already sold 212 metric tons. Nonetheless, gold is selling off after hours. As gold was bought via dollar shorts, the current unwind is sending the dollar proportionately higher.


From Dow Jones:

WASHINGTON (Dow Jones)--The International Monetary Fund said Wednesday it will soon begin selling to the market the remaining 191.3 metric tons of gold  it has slated for release, though the sales will be conducted in phases to avoid disrupting markets.

The sale of gold, currently worth nearly $6.9 billion, will begin "shortly," the fund said in a brief statement.

"In accordance with the priority of avoiding disruption of the gold market, the on-market sales will be conducted in a phased manner over time," the IMF said.

The IMF noted that central banks in Europe have said they can accommodate the fund's gold as part of their scheduled sales in the Central Bank Gold Agreement.

The IMF board approved sales of 403.3 metric tons of gold in September to create a more stable income model and boost support for low-income countries.  About 212 metric tons have already been sold off-market to central banks of India, Mauritius and Sri Lanka.

The IMF didn't rule out further off-market sales, which would reduce the amount sold to the market.

Full press release text:

IMF to Begin On-Market Sales of Gold

Press Release No. 10/44
February 17, 2010

The International Monetary Fund (IMF) today announced that it will
shortly initiate the on-market phase of its gold sales program. This is
the second phase of the total sale of 403.3 metric tons approved by the
Executive Board in September 2009 (see Press Release No. 09/310).
The first phase was set aside exclusively for off-market sales to
official holders. A total of 212 metric tons was sold during this
phase, comprising sales to the Reserve Bank of India see Press Release No. 09/381), the Bank of Mauritius (see Press Release No. 09/413), and the Central Bank of Sri Lanka (see Press Release No. 09/431).

The total amount remaining to be sold is 191.3 metric tons. In
accordance with the priority of avoiding disruption of the gold market,
the on-market sales will be conducted in a phased manner over time.
This follows the approach adopted successfully by the central banks
participating in the Central Bank Gold Agreement. Participants in the
agreement have noted that the Fund’s sales can be accommodated under
the agreed ceilings of 400 tons annually and 2,000 tons in total during
the five years starting on September 27, 2009. The initiation of
on-market sales does not preclude further off-market gold sales
directly to interested central banks or other official holders. Such
sales would reduce the amount of gold to be sold on the market.

The IMF will continue to provide regular updates on progress with the gold sales through its normal reporting channels.

Useful links:

Factsheet: Gold in the IMF:

IMF Survey: Board Backs Plan to Adopt New Income Model for IMF:

Factsheet: IMF Support for Low Income Countries:

Central Bank Gold Agreement–Joint Statement on Gold:

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Mongo's picture

Buy on the dips!

Anonymous's picture

No, dips on the buy.

Anonymous's picture

W..NBC. no, W-NBC!... no, W-N-B-C!!!

Hephasteus's picture

This should mop up some euros.

Harbourcity's picture

Preach on brother!  Last one in is the looooooser.


Anonymous's picture

The Chinese are idiots !

Waiting so long in the stupid hope they get their piece for a cheaper price. Now its going to be distributed between the wolfs elsewhere.

All because, India made them loose face when frontrunning and hitting it on 1040.

Chinese are like dance bears, its so easy to make them go where you want.

Just "Face", no brains.

Anonymous's picture

It's not like there's enough gold to cover their 2T reserve anyway. It took only 7Bs for India to buy the last 200 tons.

Anonymous's picture

Have you ever considered that the Chinese are now a major producer of gold and don't need to buy on the open market.

Charles Mackay's picture

Certainly China and maybe a few other countries would like to gobble up the whole position the IMF has to offer at once, but generally, China doesn't want to chase the market higher.

However if the Chinese truly intended to upvalue their currency, and use accumulated dollars to buy the gold, then it would make sense to bid for the gold as soon as possible.

It would be easy to imagine that a Chinese revaluation would effect gold more than just the implied devaluation given to the dollar.


THE DORK OF CORK's picture

I have to say that it mystifies me that China is playing with a poker face to save a 100 dollars a ounce when it has such huge paper reserves - this is tiny money  and is not good game strategy 

Ok it could save hundreds of millions but if the gold price spikes it could lose many Billions - it is the mindset of a petty gambler and not a large nation

Anonymous's picture

somebody doesn't understand the game being played

Charles Mackay's picture

Yes, it doesn't make much sense as strategy - especially since others managing China's reserves are saying they want to move out of higher risk US debt.

Lou629's picture

"it is the mindset of a petty gambler and not a large nation"


Our asian friends are well known for their enthusiastic (if not addicted) gambling, so it wouldn't shock me to learn that the ptb over there evidently share this enthusiasm.

Anonymous's picture

Ya, and it's the only thing in this world not being manipulated or speculated on, huh bitches?

It's headed down, my friends.

Jean Valjean's picture

We tend to think countries might be interested in this.  I'd love to see an individual step up.  Bill?  Warren?  Come on, it's only 7 billion.

assumptionblindness's picture

I wonder what would happen if the United States were to buy the remaining 191.3 tons.  Just wondering....

THE DORK OF CORK's picture

With the worlds reserve currency . It would be in the US long term interest to start buying with printed money as now that they are unwilling to kill the banks they might as well destroy their debt in a spectacular fashion.

It would be interesting to watch. - but the IMF gold is under US control so they should not stop there but start buying in the open market.

Although that would be a act of war against the rest of the countries of the Planet the above scenario assumes that the US would be acting in its national interest and evidence of that has been missing for at least 20 years.

VegasBD's picture

We have total (veto) control of the IMF, no reason to.

THE DORK OF CORK's picture

Yes but it could be the starter signal to drive the price higher and begin to wipe out the accumulated debt - I am not saying it will happen but if the global dynamics change some more then the rules of the game could change

It is the nuclear option of course.

DoChenRollingBearing's picture

To my amateur's eyes, yeah, the US Treasury could borrow a bit and buy a BIG chunk of gold with low cost and low peril.  Front run China!!!  LOL!!!  I think it would be a good move to show the world that we are a serious (?) country.

Disclosure, I bought yesterday a nice chunk of Au Eagles, a Pt Eagle and a roll of Ag 1 tozs.

Oh, do I feel better now!  But, as Master B. keeps saying, well maybe I will go to my bank REAL SOON and tell them I want a big stack of $100 Benjamins to cover other bases.  Be interesting to see how our FRNs evolve over the next couple of years.

My advice: Buy gold as your finances and Au price permit.  To my favorite extra-paranoid friends, look at platinum (hard to find) or buy silver.  Looks like the .gov will not seize platinum or silver.



THE DORK OF CORK's picture

I was hoping to pick up some platinum maple leafs but I was also expecting the price to crash to close to 1000 but now I am not so sure - also as a euro buyer my chances could be slipping from my grasp  -  ah well you win some  and you lose some

knukles's picture

With an openly professed policy of reinflation, direct purchases by the US with newly printed fiat money would be the hoot of all hoots.  A repudiation of the epitome of sound central bank policy as established by Volcker with the Saturday Night Massacre. 

Anonymous's picture

yup, from Chinese...

Anonymous's picture

If that would happen, the US$ would drop like a rock.

Anonymous's picture

speculation was that china hasn't bought this gold because the gold isn't real. the countries that bought this gold were custodian's already for the imf gold and had that exact number in reserves.

Stuart's picture

somewhere out east someone is smiling and thinking "you dumb round eye".   Like socks through a washing machine until they're no longer able to be worn, that 400 tonne IMF sale has been announced and re-announced and re-announced in whole or in part from the first time it hit the press.  Ya, ya, ya, we get it... ok...  IMF, you want the price down....  You make Gordon Brown proud you do. 



SWRichmond's picture

I was thinking the same thing: how many times will they announce this sale at some critical or pivotal juncture, over what period of time?  Dozens, no doubt.

glenlloyd's picture


Nothing but more jawboning about how we're going to sell this gold, over and over and over again. I suspect as others have said, it's being used once again as a price suppression mechanism. At any rate I would still be surprised to see any of their gold holdings get to the market. I suspect that some smart anonymous party will acquire the balance at the last minute.

I may be wrong, but we'll see.

10044's picture

"Tumble"??? It's only down 12 bucks wtf? Gave me a heart attack Tyler dude

DMA Trader's picture

It should be back to 1120 in a few hours. 


aurum's picture

i will be elated if it tumbles...just another buying op

Bill DeBurgh's picture

Wake me when it hits $900. I am backing up the truck at that point.

Anonymous's picture

Thats the thing. Nobody will let it get to that price - in physcal. Invetory is drying up.

Anonymous's picture

People like you wouldnt wake up after it was hitting 5000 US$.

Keep sleeping sheople.

lsbumblebee's picture

They remember all too well the last time it "disrupted" the market.

MarketTruth's picture

Yes, last time the IMF sold gold (to India for $1050) the gold prices went UP at a nice clip and has virtually kept that level and never fallen below it.

Thus, consider $1100 the new bottom price for gold.

Hephasteus's picture

+1158 It's a brave new month called march.

MarketTruth's picture

PS: Keep in mind my post above is au as priced in USD. If we price au in the Euro, then right now au is at/near the all time high.
(Wish i could post charts/pics).

Anonymous's picture

so does this mean they're really going to be buying gold?

Mongo's picture

Does that gold even exist? Are they keeping it in their own papervaults?

Anonymous's picture

Am I correct to assume that gold is declining on this news because the gold market had priced in that there would be one or two buyers who would take that gold off of the IMF's hands in one or two big orders. But, the IMF was unable to find such a buyer so now the IMF will be a steady supply on the market for a while.

GoodBanker's picture

That's certainly the intended impression. Fear not, this impending supply dump has been lingering over the market for 9 years now. The media parades the news around for a while, usually during periods of ultra-thin volume so as to elicit the greatest price response possible, after which large buyers swoop in and pick up the crumbs. Rinse and repeat.