Finally, IMF to sell 403 tonnes of gold

Finally, the International Monetary Fund (IMF) is selling its 403 tonnes of gold after months of speculation over the sale and its presumed impact on markets.

IMF said in a statement the sales would be in a volume strictly limited to 403.3 tonnes, with these sales to be conducted under modalities that safeguard against disruption of the gold market.

The IMF said the decision was a central element of a new income model for the institution that had been approved by the executive board in April 2008.

The Group of 20 developed and developing countries decided at their April summit in London that the money raised by the gold sales should allow the IMF to offer favorable conditions on loans to the poorest countries.

The IMF said the sale of gold will also increase the fund’s resources for lending to low-income countries, a strategy that won board backing in July.

The amount of gold is one-eighth of the current holdings of the Washington-based IMF, one of the world’s biggest holders of the precious metal.

The IMF did not state the value of the gold to be sold but based on the current bullish market price for the metal, it is estimated that the sale would fetch 13 billion dollars.

Under the approved plan, the IMF would offer to sell gold directly to central banks or other official sector holders if there were to be interest from such holders.

The IMF said such transactions would redistribute official gold holdings without changing total official holdings.

Under the fund’s Articles of Agreement, all gold sales must be conducted at market prices, including direct sales to official holders.

Also the gold sales could be conducted on-market in a phased manner over time, and such on­market gold sales will not add to the announced volume of official sales, it said.