Gold News

Spinning the IMF Gold Sales

India bought 200 tonnes of IMF gold. Now the Fund is selling another 191.3 tonnes...

announced its purchase of 200 tonnes of IMF gold in November, it added a statement that it might buy more of the International Monetary Fund's gold as well, writes Julian Phillips at

This implied that it was limited by the IMF to the 200 tonnes it bought. But the IMF never said that. Rather it said it would announce the sale of any other portion of their gold to the public.

It has been several months since another sale took place, leaving the IMF with 191.3 tonnes of the 403 tonnes slated for sale still up for grabs. Now with last week's announcement, we are given the impression that central banks have not come forward to buy and are therefore not buyers.

Talk about "spin"!

China for sure would not buy if an announcement were to be made. It would rather Buy Gold once it had been sold in the open market, for it could then buy through its chosen bullion bank or bullion banks – and do so "under the radar". In fairness to the IMF, they have said they are open to central banks buying direct from them still, and will announce such sales. But you must realize that any further sales through the 'open' market will be done anonymously. This levels the playing field. However, all we will now hear is the completion of such sales.

If the IMF decides to sell 4 tonnes a week, we will hear about it through the ECB website in tonnage terms but with no further details. Will we hear of a 100 tonne sale done this way? Unlikely, but possible!

The gold market first reacted by fearing a dumping of this amount of gold, but once it gathered itself together, the market realized that the IMF's open-market sales could be bullish for the Gold Price.

After all, 191 tonnes is an amount that the gold market does not see often, so a big buyer in the wings, finding that much gold for one price, might well come and bid for it. But will the IMF offer the amount to the market in one go or drip feed it? No one knows. They can now play the game as they choose.

If the IMF wants to sell its gold quickly, it is incumbent upon the Fund to accept a bid for the entire amount. But rarely is life so straightforward, these days. The reality is that there is the demand for such amounts in one sale. But the real question is, "Do the IMF want to sell it in one go?"

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JULIAN PHILLIPS – one half of the highly respected team at – began his career in the financial markets back in 1970, when he left the British Army after serving as an Officer in the Light Infantry in Malaya, Mauritius, and Belfast.

First he worked in Timber Management and then joined the London Stock Exchange, qualifying as a member and specializing from the beginning in currencies, gold and the "Dollar Premium". On moving to South Africa, Julian was appointed a macro-economist for the Electricity Supply Commission – guiding currency decisions on the multi-billion foreign Loan Portfolio – before joining Chase Manhattan and the UK Merchant Bank, Hill Samuel, in Johannesburg.

There he specialized in gold, before moving to Capetown, where he established the Fund Management department of the Board of Executors. Julian returned to the "Gold World" over two years ago, contributing his exceptional experience and insights to Global Watch: The Gold Forecaster.

Legal Notice/Disclaimer: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Gold Forecaster/Julian D.W. Phillips have based this document on information obtained from sources they believe to be reliable but which it has not independently verified; they make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold Forecaster/Julian D.W. Phillips only and are subject to change without notice. They assume no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, they assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this report.

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