A surprise to some, expected by many, the IMF announced late yesterday their plan to sell over 400 metric tons of gold.  Even though many have suspected that IMF was going to dump a lot of gold on the market, this amount of gold is likely a surprise to many.

The IMF has pledged not to disrupt the markets with this sale, but the announcement itself is likely to have a big impact on the markets.  They also said they may sell some of the gold directly to center banks.

The IMF receives it’s gold from member nations who sell theirs to the IMF at a huge discount, $42 on ounce.  Gold is currently trading at around $1000 dollars an ounce.  The discounted sale of gold by member nations to the IMF, is in reality a contribution.  Most of the gold that will be sold by the IMF was once gold held in the US reserves.

One of the goals for this sale is to improve “surveillance of members” according to the IMF website as well as making contributions to poor countries.  According to Managing Director, Dominique Strauss-Kahn “These sales will be conducted in a responsible and transparent manner that avoids disruption of the gold market.”

IMF Board Approves Sale of 403.3 Metric Tons of Gold

Official Gold Reserves

IMF Official Announcement

This entry was posted on Saturday, September 19th, 2009 at 9:16 am and is filed under Today's World. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.