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Daily Metal Prices & Market News
Tuesday 02nd of December 2008
Tuesday, April 8, 2008

IMF proposes gold sale

Story link: IMF proposes gold sale
by Gill Montia
IMF proposes gold sale

The International Monetary Fund (IMF) is overhauling its investments and plans to sell off £5.5 billion worth (or 403.3 tonnes) of its gold reserves.

IMF revenues have been declining for some time and the funds raised from the sale would be used to restore its finances and diversify investments.

The organisation’s main source of income is from lending to its 185 member states, many of which have been building up reserves to avoid turning to the IMF, which has generally been seen as a lender of last resort.

The US is the IMF’s biggest stakeholder and the plans to sell the gold will need the approval of the US Congress.

This may not be straightforward as there is a level of hostility within Congress to the activities of the IMF.

The sale of the gold would need to take place over several years to avoid market disruption.

Currently around 500 tonnes of the metal are traded annually and the IMF input could have a dramatic impact on the market, even if it occurs gradually.

It is understood that the IMF is basing its estimates on a gold price of around $850 oz, well below current trading levels.

 

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