IMF to start sales of 191.3 tonnes of gold soon

WASHINGTON: The International Monetary Fund on Wednesday said it will shortly begin selling 191.3 tonnes of gold in the open market under a program approved last year to boost its resources for lending.

To avoid disruptions of the gold market, the IMF said the sales "will be conducted in a phased manner over time." The fund left the door open for central banks to keep buying the gold directly from the IMF.

The IMF announced last year it would sell a total of 403.3 tonnes of gold, about one-eighth of its total stock, to diversify its sources of income and increase low-cost lending to poor countries.

Until now, the gold has only been made available to central banks on a first-come-first-serve basis. So far, India -- the world's biggest consumer of gold -- Mauritius and Sri Lanka have purchased a total of 212 tonnes of gold from the IMF.

The Reserve Bank of India was the biggest purchaser, snapping up 200 tonnes of the IMF gold over two weeks in October, boosting its gold holdings to the 10th largest among central banks.

IMF Finance Director Andrew Tweedie told IMF Survey publication that the average price for the three sales was a little over $1,050 an ounce, generating about $7.2 billion in proceeds and a profit of about $4.5 billion over the book value of the gold in the IMF's accounts.

The price of gold has increased by 20 percent over the past two years. Spot gold traded at about $1,104 an ounce on Wednesday after peaking at $1,126.85, its highest since Jan. 20.

The IMF said central banks could continue to buy the gold, which would reduce the amount of gold available for sale on the open market.

"We are still open to off-market sales, so that window has not closed," Tweedie said, adding: "All that has happened now is that we are moving to also start on-market sales."

He said the sales would be based on market prices.