IMF debt relief causes gold concerns

The US and Canada have expressed reservations about G7 proposals to sell of IMF gold stocks to cancel poor nation debt.

As a consequence of the announcement, the price of gold fell to $413.50 an ounce in Asia, before rising slightly in Europe.

The IMF has reserves of 3,217 tonnes of gold - around 113.5m ounces - which means it could raise billions in sales of gold reserves.

By revaluing its holdings, the IMF may be able to sell billions of dollars of gold and use the cash to cancel debts owed by the world’s poorest nations.

However, doing so could lead to extensive devaluation of the price of gold, which has led to concerns being raised by producer countries.