IMF gold sale expected to have limited impact on prices
Thursday, 24 September 2009
NEW YORK, Sept 23 (AFP): The IMF's decision to unload more than 400 tonnes of gold is unlikely to have a major impact on the market at a time when prices of the metal are at a near- record high, analysts said Monday.
The International Monetary Fund announced Friday that its executive board had endorsed the sale of 403.3 tonnes of gold, worth about 13 billion dollars at current prices, to boost its lending capacity to poor countries.
Gold prices jumped last week to within grasp of record highs above 1,000 dollars per ounce on the back of a weak dollar and mounting economic optimism.
Last Thursday, gold hit 1,024.28 dollars an ounce in London the best level since March 2008 when it struck a record 1,032.70 dollars.
"The market has been widely expecting the confirmation of the (IMF gold) sales that were first proposed in January 2007," said Suki Cooper at Barclays Capital.
The IMF move "is short-term negative," Cooper said, forecasting a "five to 10 per cent retracement" in prices.
In New York, gold futures prices for December fell to 1,004.80 dollars at 1525 GMT on Monday from 1,010.30 dollars Friday. They had closed above 1,023.00 dollars on Thursday, near the historic high of 1,033.90 dollars in March 2008.
The IMF announced the gold sale soon after the market closed on Friday, saying sales would be conducted under "modalities that safeguard against disruption of the gold market."
The International Monetary Fund announced Friday that its executive board had endorsed the sale of 403.3 tonnes of gold, worth about 13 billion dollars at current prices, to boost its lending capacity to poor countries.
Gold prices jumped last week to within grasp of record highs above 1,000 dollars per ounce on the back of a weak dollar and mounting economic optimism.
Last Thursday, gold hit 1,024.28 dollars an ounce in London the best level since March 2008 when it struck a record 1,032.70 dollars.
"The market has been widely expecting the confirmation of the (IMF gold) sales that were first proposed in January 2007," said Suki Cooper at Barclays Capital.
The IMF move "is short-term negative," Cooper said, forecasting a "five to 10 per cent retracement" in prices.
In New York, gold futures prices for December fell to 1,004.80 dollars at 1525 GMT on Monday from 1,010.30 dollars Friday. They had closed above 1,023.00 dollars on Thursday, near the historic high of 1,033.90 dollars in March 2008.
The IMF announced the gold sale soon after the market closed on Friday, saying sales would be conducted under "modalities that safeguard against disruption of the gold market."