Finmarket, a Russian news agency, reported that China has confirmed the intention to purchase 191.3 tons of gold from the International Monetary Fund at an open auction. The author came out an hour later to state that she did not have confirmed official sources, although the IMF declined to comment.
Many investors, myself included, considered the IMF gold sales to be much ado about nothing. I figured that if the IMF really did offer up physical gold, China or another country would step up eagerly to reduce their exposure to increasingly toxic fiat dollars. I still feel this to be the case, but certainly understand why Chinese authorities would not want the news leaked before the purchase. They could be forced to pay a much higher price for those 191 tonnes if the market moves first. However the dust settles on this story, I believe precious metals are certain to make new highs before the end of the year.
World central banks started to increase their gold reserves after prices on gold began to climb in 2001. The IMF sells gold within the scope of a program to diversify sources of income and achieve an increase in lending.
The IMF announced an intention to sell 403.3 tons of gold in accordance with the adequate decision made by the board of directors of the fund in September of 2009. India, Mauritius and Sri Lanka purchased about 212 tons of the amount at the end of 2009. India purchased most – 200 tons.
China’s interest in international trade is connected with the development of the nation’s economy, as well as with the growing consumer demand in the country.
“Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market. China is interested in the development of the domestic consumer market,” the agency reports.