India Gold Buy Sets Record

From Surojit Gupta and Lesley Wroughton, Reuters:

The International Monetary Fund has sold 200 tonnes of gold to the Reserve Bank of India for $6.7 billion, quietly executing half of a long-planned bullion sale that has threatened to slow gold’s ascent….

…Although the IMF’s plan to sell a share of its gold holdings in order to increase low-cost lending to poor countries had been flagged for a year before it was formally approved in September, the speed, scale and identity of the buyer were a surprise….

….The market’s focus has now shifted to China, which has reportedly been in talks with the IMF about buying some of the fund’s bullion as Beijing seeks to shift some of its more than $2 trillion in foreign exchange reserves away from the U.S. dollar….

Already the world’s top producer of gold and rivaling India as a consumer, China revealed this year that it had quietly lifted its own government holdings of gold stocks to 1,054 tonnes from 600 tonnes when it last reported its holdings in 2003.

200 tonnes is decent chunk. I’ve seen varying estimates, but according to Peter Bernstein, the total supply of gold is 125,000 tonnes. That puts this single purchase at about two-tenths of one percent of the total.

Comments

[DiggerUK:]

People have been squawking about IMF gold sales "manipulating" the price of gold down, for as long as any of us can remember. Well, now the first tranche has been sold, and the p.o.g. has gone....hmmm, can't get my Kitco chart to work.

It was argued by many, that it was a non story for a quiet day in the news room. And guess what. They haven't got a story for quiet days in the news room anymore.

Ah well, back to shape shifting lizard stories then.

Nov 03 02:36 PM