IMF Left Holding its Gold as Buyers Fail To Materialise |
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February 19, 2010
When India bought 200 tonnes of gold from the International Monetary Fund late last year, investors assumed other countries would follow, viewing New Delhi's move as a sign that Asia's central banks were diversifying their swelling reserves from US dollar assets into bullion.
When India bought 200 tonnes of gold from the International Monetary Fund late last year, investors assumed other countries would follow, viewing New Delhi's move as a sign that Asia's central banks were diversifying their swelling reserves from US dollar assets into bullion.
Sri Lanka and Mauritius made small purchases from the IMF and speculation that China would follow was widespread. But the IMF's announcement on Wednesday that it has not found further buyers for the remaining 191.3 tonnes it wants to sell - equal to about 5 per cent of annual global demand - signals that other central banks are not ready to buy. Or not publicly, at least.
Philip Klapwijk, executive chairman of GFMS, the London-based precious metals consultancy, says the IMF's decision underlines a lack of buying interest, particularly with bullion trading above $1,100 a troy ounce, near its all-time high.
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