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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:
http://www.imf.org/external/np/exr/facts/gold.htm

IMF Survey: Board Backs Plan to Adopt New Income Model for IMF:
http://www.imf.org/external/pubs/ft/survey/so/2008/NEW040708A.htm

Factsheet: IMF Support for Low Income Countries:
http://www.imf.org/external/np/exr/facts/poor.htm

Central Bank Gold Agreement–Joint Statement on Gold:
http://www.ecb.int/press/pr/date/2009/html/pr090807.en.html

 


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Thu, 02/18/2010 - 00:01 | Link to Comment asteroid
asteroid's picture

I'm wondering what kind of gold are they going to sell?  Would that be real gold, or gold-plated tungsten?

Buyer--beware!

 

Thu, 02/18/2010 - 00:18 | Link to Comment Tethys
Tethys's picture

In related news -

South Carolina Rep. Mike Pitts has introduced legislation that would mandate that gold and silver coins replace federal currency as legal tender in his state. 

http://www.cbsnews.com/blogs/2010/02/17/politics/politicalhotsheet/entry...

Thu, 02/18/2010 - 02:26 | Link to Comment merehuman
merehuman's picture

 Applause to that.

Thu, 02/18/2010 - 03:13 | Link to Comment faustian bargain
faustian bargain's picture

worth keeping an eye on developments, but I'm not holding my breath.

Thu, 02/18/2010 - 00:28 | Link to Comment Mr. Mandelbrot
Mr. Mandelbrot's picture

My favorite aspect of gold is its ability to function "off the grid."  I buy it with cash without sales tax anonymously.  I can sell it for cash anonymously while taking a much smaller haircut than the capital gains taxes I would have paid on paper investments.  My descendants will not be paying estate taxes when they receive the combination to my vaults upon death, etc., etc.  Why aren't more of us using these tactics?  Is it any wonder we've been weened off of intrinsically valuable commodity monies and hooked on enslaving paper?

Thu, 02/18/2010 - 01:22 | Link to Comment Burnbright
Burnbright's picture

I agree, people really don't understand the benifits to using just gold or silver. They are freaking huge! Little risk and huge reward its win win and no one seems to care for some reason.

Thu, 02/18/2010 - 02:40 | Link to Comment faustian bargain
faustian bargain's picture

It's because it's too "different" and they didn't think of it first, therefore it's stupid to them. Ego.

Thu, 02/18/2010 - 00:29 | Link to Comment Anonymous
Thu, 02/18/2010 - 00:39 | Link to Comment johngaltfla
johngaltfla's picture

ChiComs say:

 

Thank you dumbasses.

Thu, 02/18/2010 - 01:07 | Link to Comment chindit13
chindit13's picture

I'm always late to these parties, given the time difference and my occasional need for sleep, but I will repeat, or rather consolidate, a couple of anecdotal bits relating to gold in Asia:

---at the moment, Chinese would rather buy property at an all-time high than gold ten percent off of its ATH...go figure

---Chinese who have "arrived" are wont to show off...one can wear $100K worth of jade or diamonds more easily than anyone, save for a buffed gangsta rapper, can wear $100K worth of gold, at least at this date...thus many individual Chinese are dumping gold and buying jade and diamonds

---gold production in Western China and Eastern Burma is up substantially in the last year, as $1000/oz resulted in large population shifts of the modern day equivalent of the '49ers...and neither China nor Burma feel compelled to report their production to the World Gold Council

---gold is not "mystical" in Asia, this myth resides in the minds of Westerners who are somewhat inexperienced with the Inscrutable East...gold is merely a store of value when people (previously) did not trust banks and had limited access to purchasing land...the gold is traded for paper as needed to buy the necessities of life, and during flush times the excess paper is turned back into gold...today is not a flush time, despite the headlines to the contrary

Thu, 02/18/2010 - 01:11 | Link to Comment monopoly
monopoly's picture

This is such a bunch of crap. There is nothing new here. Trying to upset the market, we are way past that. Is there an intelligent govt. anywhere on this planet.  Sure maybe for a day or two. I will be buying more gold by the end of the day tomorrow and adding to AEM. What an earnings report. Wow.

Thu, 02/18/2010 - 06:46 | Link to Comment Anonymous
Thu, 02/18/2010 - 01:19 | Link to Comment Anonymous
Thu, 02/18/2010 - 01:54 | Link to Comment order6102
order6102's picture

950 there we come!

Thu, 02/18/2010 - 02:28 | Link to Comment Hephasteus
Hephasteus's picture

Easier to move heaven and earth than to break through 1050. Easier to remodel heaven and earth after moving it than to break through 980.

Thu, 02/18/2010 - 03:50 | Link to Comment order6102
order6102's picture

thats exactly why its going to happened, bcs nobody expects it! 950 gold, 10 silver, 1 copper 30 oil... who can expect it? How about 50bps on 10y bonds? did somone expected it? Been there seen it, got t-shirt...

Thu, 02/18/2010 - 07:10 | Link to Comment Hephasteus
Hephasteus's picture

Shit in one hand and wish in the other and see which one fills up faster.

Thu, 02/18/2010 - 10:22 | Link to Comment Stuart
Stuart's picture

NOT todayyyyyyy!!!

Thu, 02/18/2010 - 02:45 | Link to Comment Harbourcity
Harbourcity's picture

None of this shit matters.  Smoke and mirrors.  If you`re in gold, you`re in gold long-term.  The real pay off won`t happen until it all plays out and there`s more this bs to come.  Don`t complain, it`s giving you time to buy more.  You think a glut in gold... what the hell do you call this fiat bullshit.

 

Thu, 02/18/2010 - 02:47 | Link to Comment Harbourcity
Harbourcity's picture

PS would you buy any IMF gold if the last lot you got was full of Tungsten.  No wonder China is digging up their own.

 

Thu, 02/18/2010 - 03:10 | Link to Comment Gunther
Gunther's picture

If the anounced sale of 200 tons gold brings the price from ~1114$ to ~1098$ the market is strong. That move is only noise.

 

Thu, 02/18/2010 - 03:20 | Link to Comment Rick64
Rick64's picture

The IMF is a sham, their ulterior motives have nothing to do with helping or bailing out countries, and the CEO is the U.S. If Soros is buying gold that says something. Actions speak louder than words.

Thu, 02/18/2010 - 03:46 | Link to Comment order6102
order6102's picture

its amazing how much excitement yellow shiny stuff creates here! Whatever... They have to take all 75mg of Astatine from my cold dead hand...

Thu, 02/18/2010 - 04:20 | Link to Comment nevket240
nevket240's picture

Idiotic Manipulative F#ckwits + George Soros = Trouble.

regards

Thu, 02/18/2010 - 06:18 | Link to Comment Escapeclaws
Escapeclaws's picture

Gold is up in euros down in the dollar. Gold is therefore holding more or less steady in intrinsic value.

Thu, 02/18/2010 - 06:46 | Link to Comment Anonymous
Thu, 02/18/2010 - 08:35 | Link to Comment Anonymous
Thu, 02/18/2010 - 10:27 | Link to Comment Anonymous
Thu, 02/18/2010 - 11:09 | Link to Comment BernankeCo
BernankeCo's picture

The future for the USA is very bleak; a future resembling that of a socialist country like Canada or UK, but far worse.

With mass complacency to big government, nanny state initiatives people's constitutional rights will slowly be eroded.othing!" We live in a Financial Aristocracy and D1CTAT0RSHIP!

Thu, 02/18/2010 - 11:03 | Link to Comment cocoablini
cocoablini's picture

It's an accounting scam-when does India take delivery? Like never, folks. They pass the paper to India and hold the gold in London or NY. Give me a break.
If India took possession like China took possession last year(because they are making their own exchange in Hong Kong) then gold would have shot up 100 bucks again as the Brits would have to go GET the gold on the open market.

Thu, 02/18/2010 - 18:51 | Link to Comment Anonymous
Fri, 02/19/2010 - 16:36 | Link to Comment Anonymous
Wed, 02/24/2010 - 12:23 | Link to Comment aka_ces
aka_ces's picture

deleted

Mon, 04/19/2010 - 08:32 | Link to Comment Tom123456
Tom123456's picture

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