Wikinvest Wire

IMF announces gold sales, prices fall, rise

Thursday, February 18, 2010

Well, it looks as though the gold price is now recovering nicely from the announcement yesterday by the IMF (International Monetary Fund) that they intend to sell another 191 tonnes of gold bullion on the open market.

A graphic depiction of the damage that was done yesterday is shown below from this item at the International Business Times, but, since this chart was created last night, the gold price has risen smartly back up to almost $1,120 an ounce.
IMAGE Data from Kitco shows that the gold price dipped about $10 an ounce in the span of about 15 or 20 minutes immediately following the after-hours news release, to as low as about $1,097 an ounce. But, like the many other times that the IMF has announced gold sales, fear of flooding the market and depressing prices appears to be fleeting.

The most recent announcement is part of a program that was approved last fall to sell 403 tonnes of gold bullion and this follows the surprising move by the Reserve Bank of India a few months ago to buy almost the entire first half of the overall sale.

For years, the threat of IMF gold sales has been hanging over the market and what happens with the 191 tonnes now offered up for sales could have a big impact on the gold price. While the sales are to be "phased in" over time, the IMF is still open to off-market sales and many believe that an Asian central bank such as China would be a willing buyer at lower prices.

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Hal (GT) said...

I have a suspicion that as we saw last time they announced an auction that the price will seek a new high within a short period.

I think it is very telling that the gold market took this news and digested it in less than a 24 hour period and sent the price right back up to levels were it was yesterday.

Some think the metal is acting more like a currency than a commodity at this point.

Duff said...

Despite all the efforts of the Propoganda Machine to keep Gold Prices down and that includes today's propogana on the IMF gold sale and the correlated bullion bank triggering of the auto-pilot black box fund selling, the fundementals of the physical gold and silver markets remain undeniable.

What is so evident is how the Management of Perceptual Economics (MOPE) propoganda is so well honed in that in almost every release, article and PR piece on the anouncement is that the announced IMF gold sales the phrase "to avoid disruptions in the market," is used and of course such a phrase is designed to do just that. These are desperate efforts. See how much of that Gold is available for physical delivery at today's prices. I would wager "none."


Hal (GT) said...

I agree with you, Duff. Your comment about avoiding "disruptions in the market" reminds me that the IMF is I believe prohibited from selling on the open market for this reason, even though the news reports said on the open market. The sales are auctioned off in increments.

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