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IMF says it sold less gold in October

November 30, 2010 by · Leave a Comment 

By Frank Tang and Lesley Wroughton
Monday, November 29, 2010


The International Monetary Fund has slowed the rate of selling its gold by 40 percent in October from the previous month, as interest among central banks to own the metal increased as a hedge against economic uncertainty.

The IMF sold 628,000 ounces (19.5 tonnes) of gold in October as part of its previously announced open-market bullion sales plan, an IMF spokesman said on Monday.

October’s gold sales were sharply below the 1.04 million ounces sold in September, when nearly a third of the sale was going to Bangladesh.

The IMF said late last year it would sell 403.3 tonnes or one-eighth of its total gold reserves to boost its lending resources. The fund said the sale would avoid disruptions to the gold market.

Many analysts expect world central banks as a group could become net buyers this year despite the IMF’s gold sales, reversing a trend in the last several decades.

Based on information from the IMF’s Financial Statistics database, the spokesman said cumulative on-market sales of IMF gold to the end of October was 4.8 million ounces (148.6 tonnes).

The sales were part of IMF plans announced in February to begin phased sales of 191.3 tonnes of gold in the open market this year.

Gold previously sold directly to central banks were 222 tonnes to India, 200 tonnes to Mauritius, 10 tonnes to Sri Lanka, and 10 tonnes to Bangladesh.

Gold prices hit an all-time high of $1,424.10 early this month before retreating. The rally was driven in part by expectations that the Federal Reserve would buy back U.S. Treasuries to stimulate economic growth.

However, gold’s rally appeared to stall despite concerns about the fiscal health of euro zone economies after a bailout on debt-stricken Ireland and rising tensions on the Korean peninsula.

On Monday, spot gold traded at around $1,365 an ounce. Still, the metal has rallied more than five-fold from about $250 an ounce back in 2001.

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