Sold! IMF 10 Tonne Gold To Bangladesh

After India and Sri Lanka, Bangladesh has bought 10 tonnes of gold for $403 million from the International Monetary Fund.

IMF had sold 200 tonnes of gold to India last year under a programme to sell 13 per cent of its yellow metal holding. The transaction with the Bangladesh Bank, using September 7 market prices, brings the total of IMF gold sales to central banks of different countries to 222 tonnes. Last year Sri Lanka and Mauritius also bought 10 tonnes and 2 tonnes of the precious metal respectively.

The lender’s executive board in September last year approved the sale of 403.3 tonnes of bullion as part of a plan to shore up its finances and lend at reduced rates to low-income countries. After selling only to central banks, it expanded sales to the open market in February.

“The U.S. dollar doesn’t look so good in the long term. The Chinese and everbody else want to diversify their portfolio,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. “I think the central banks on our side and the Middle East would like to buy some gold.”

As of the end of July this year, the agency sold 88.3 tonnes of gold under on-market sales, announced in February 2010, it said. In November last year, Reserve Bank of India purchased 200 tonnes of the metal from IMF for $6.7 billion to put the country at number 10 among the list of top gold-holders in the world.

An uncertain outlook for two of the world’s major reserve currencies—the dollar and the euro — is seen providing a spur for central banks to buy gold, which has gained as much as 15% this year.

While Thursday’s sale was modest in size, it drew the attention of markets. More than 120,000 contracts traded on Thursday, making the IMF sale less than 3% of a relatively light trading day on the COMEX exchange in New York.

Earlier this year there were reports China was prepared to buy bullion from the IMF, though those reports were disavowed as the country, which is also the world’s top gold producer, was likely to turn to domestic supply.

“They will only buy if the price is really really attractive. I don’t think China will enter the market. If they are in the market, the price will jump,” said Leung of Lee Cheong.

But dealers said Asian banks’ interest in having gold holdings in their reserves will support gold prices and increase as the region’s economic might grows.

“They prefer to buy on a break lower, but as the power continues to shift east, they continue to buy it and gold continues to head up over the long term,” said McGhee of Integrated Brokerage Services LLC.

commodityonline.com

in.news.yahoo.com

Gold was last quoted at $1245.00/oz in New York last Friday.

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