IMF to sell gold
From Market Watch we can read that IMF will be selling a significant portion of its gold supply. The Fund is the third largest holder of gold in the world with a total of 113.5 million ounces valued at approximately $103 billions in stock. The selloff consists of $13 billion dollar or 12,5 % of their total supply. Some of the money will be used to cover deficits of $400 millions. According to the article there are
[...] at least two key hurdles. One is that the U.S. Congress must approve the IMF’s proposal to sell gold. And most member countries also will have to enact legislation to expand the IMF’s investment authority.
With gold over $900 and the euro at $1.57 I would be really surprised if the congress did not approve the proposal. As the dollar keeps loosing momentum to almost every foreign asset class, the selloff could be viewed as an aesthetic short term dollar fix. Regarding the long term, additional gold supply will hardly affect prices as investor demand is continually fueled by overall economic weakness.
