IMF Sales: The Gold for Sale Is Different from the Rest
Source: Mineweb.com (2/27/08)
It looks as though any sales by the IMF will be restricted to 400 tonnes used in a previous sale and repurchase agreement – and in any case would be made within the existing CBGA sales Agreement. The market is right to remain unfazed!
The recent announcement from the US Treasury on 25th February, approving in principle the proposal for the IMF to sell some of its gold reserves, marked a reversal of policy and generated a knee-jerk reaction in the gold market, with prices dropping by $10 to close at $938 that day.
The drop was short-lived, however. The fact that the major Exchange Traded Funds reported a combined increase in holdings of 12 tonnes on that day illustrates that the market was prepared, on sober reflection (although there is little in this market at the moment to suggest any notable periods of composed consideration), to absorb the news and concentrate more on the other forces that are driving prices higher, notably fears of stagflation, higher oil, a falling dollar and technical considerations.