IMF will sell up to 403.3 tonnes of gold - could begin next week

The International Monetary Fund said it will sell one-eighth of the agency's gold reserves-without disrupting the gold market - beginning at the end of this month.

RENO, NV - 

The IMF Executive Board has approved the sale of one-eighth of the agency's gold reserves, up to 403.3 metric tons, with the sales to be conducted under safeguards against disruption of the gold market.

The gold sales are a critical element of a package of measures approved in April 2008 aimed at setting the IMF's finances on a sound long-term financial footing. An endowment will be created with the profits from the gold sales.

The gold sales profits are also aimed at increasing the fund's resources for lending to low-income countries, a policy approved in July of this year. The IMF hopes to increase its concessional lending by up to $17 billion through 2014, including up to $8 billion over the next two years. The agency also approved zero interest payments on outstanding concessional loans through the end of 2011 for all low-income members.

Because of the global economic crisis, the IMF has more than doubled its financial assistance to low-income nations. "Since the crisis hit, we have been listening and responding to our members countries," said IMF Managing Director Dominique Strauss-Kahn. "The scaling up of the IMF's support not only will help these low-income countries weather a crisis that is not of their making, once the crisis has passed, it also will pave the way for progress in the battle against poverty."

The IMF holds 103.4 million ounces (3,217 metric tons) of gold valued at about $9.2 billion on the basis of historical cost. As of August 28^th, the IMF's holdings amounted to $98.8 billion at current market prices.

When the IMF was founded in 1944, it was decided that 25% of the initial quota subscriptions and subsequent quota increases were to be paid in gold. This represents the largest source of the agency's gold.

All payments of charges (interest on member countries' use of IMF credit) are normally made in gold.

In the past, the IMF has sold gold on several occasions to replenish its currencies holding. The fund also sold gold to offset operational deficits, and to reduce its past gold holdings.

In August, the European Central Bank and other central banks renewed the Central Bank Gold Agreement, which limits gold sales to not exceed 400 metric tons annually and 2,000 metric tons over the next five years, beginning on September 27, 2009. The central banks' announcement noted that sales of 403 metric tons of gold by the IMF can be accommodated with these ceilings.

Strauss-Kahn said, "These sales will be conducted in a responsible and transparent manner that avoids disruption of the gold market. Most importantly, the sales are strictly limited to 403.3 metric tons, which is one-eighth of the fund's total holdings, so the IMF will continue to hold a relatively large amount of its assets in gold." Since the IMF is the third largest holder of gold after the United States and Germany, unexpected large sales of gold could disrupt the gold market.

Prior to selling the gold on the market, the IMF is prepared to sell the gold directly to central banks or other official sector holders. These sales to official sector holders will be conducted at market prices and would shift official gold holdings without changing total official gold holdings.

Any gold sales on the market would be phased over time, the IMF said. Regular external reporting on gold sales will also be provided to assure markets that gold sales are being conducted in a responsible manner.

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responses to this article

imf gold sales I hope China buys it and never gives it back! by David on September 21 2009, 07:56 Find this comment inappropriate? Report it

Just a small dent. The amount of paper gold being traded exceeds the amount of physical gold by 70 times. This is NOTHING. by Joe on September 21 2009, 10:35 Find this comment inappropriate? Report it

IMF gold sales/David 07:56 Read my mind, couldn't agree more. Hope China buys lots more gold but directly on the market and openly at that ! by Robert on September 21 2009, 11:26 Find this comment inappropriate? Report it

David/07:56 Read my mind,couldn't agree more. Hope China buys lot more gold but directly on the OPEN market at that. by Robert on September 21 2009, 11:32 Find this comment inappropriate? Report it

China loves the IMF This makes it easy for China to buy 403 tonnes all at once without spiking the price! by Fortune Cookie on September 21 2009, 11:48 Find this comment inappropriate? Report it

Know Gold, No Gold This is another IMF gold price control farce. No gold will change hands, no cash will be paid out. Nothing will happen. by Kimball Kaleach on September 21 2009, 17:24 Find this comment inappropriate? Report it

paper gold paper gold, keeps the market manipulators in control of the world financial markets! What they do now secures their plans for the future! They control the present and future! GET THE PICTURE, wake up and smell the coffee! by streetpreacher on September 21 2009, 19:15 Find this comment inappropriate? Report it

foreign markets We (the USA) made the japs rich, now were making the chinese rich! We are being sabatoged economically because the most wealthy have created a system you must be dependent on! They control the money, they control the people! They could bankrupt . .more china or japan or most other countries anytime they want! Firstn they conquered the USA, then they turned to other major key economies! Today (2009) we call it globalization! . .less by streetpreacher on September 21 2009, 19:21 Find this comment inappropriate? Report it

economics 101 A more advanced course is economics 404, then there is the 505, and 606! I owe, I owe so off to work I go! by streetpreacher on September 21 2009, 19:24 Find this comment inappropriate? Report it

Gold and CMKX I think China buys the gold.. I wonder if the IMF is selling it to satisfy the future CMKX settlement in the US? Ameritrade, Etrade, et all sold trillions of shares into the market with the blessing of the SEC. Now payment time is near! by Tony Marcus on September 21 2009, 23:24 Find this comment inappropriate? Report it

IMF gold china buy gold at low price or directly throw international markeet by chandar on September 22 2009, 05:51 Find this comment inappropriate? Report it

Post a note economics, or how I learned to stop worrying and live with the lies So let me see here, they are going to sell 403 Tonnes of Gold for what? More Worthless debt based fiat currency or electronic credits issued by the largest crime family banks on the planet and then stick a post-a-note on the pile of gold that says . .more this now belongs to WHO?? How about if we really start exposing who these folks are that are making these alleged statements on behalf of the IMF which is owned by WHO?? Can we say Rockefellar/Rothchild/Bush crime families boys and gurls?? just another diversion to keep you from looking at what is really going on, which is "The Last Waltz of the Tyrants" ! End of Rant. DW . .less by Dennis Ward on September 23 2009, 16:07 Find this comment inappropriate? Report it

GOLD PRICE BY 2010 IT WILL AGAIN BOUNCE BACK TO 14000 TAG PER TEN GRM by ANKUR GOYAL on September 24 2009, 22:45 Find this comment inappropriate? Report it

Imf gold It should be sell in open market so public can get benefit to buy it by Deepak verma on October 23 2009, 08:07 Find this comment inappropriate? Report it

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