Possible Headwind for Gold
Source: Seeking Alpha, Old Trader (7/1/10)
"Pretty sizeable supply overhang might weigh on the price of gold."
It wasn't made clear if the rise in Russia's holdings was due to open market purchasing, or whether Russia, like China, used domestic production to add to their reserves. Of course, even if the rise was caused by domestic production being added to reserves, which would seem to me bullish, as that's production that doesn't appear on the open market.
What might cause gold's price to falter, at least in the short- to mid-term, is the fact that the IMF still plans to sell roughly 137.5 metric tons in the open market. The IMF had announced last year, it would be selling a total of 403.3 metric tons of gold. Roughly 212 metric tons have already been purchased by India, Mauritius and Sri Lanka,
Now, subtracting the 212 tons from 403.3 leaves 191.3 tons, and it wasn't made clear where the 53.8 tons difference will end up. I would think that it's highly unlikely the IMF would "dump" that much onto the open market, but the knowledge of a pretty sizeable overhang of supply might well weigh on the price of gold.