February 22, 2010 – Investors will be carefully monitoring events after an announcement by the International Monetary Fund, or IMF, that it plans to start selling 191.3 tons of certified gold bullion. While this move is seen as an attempt by the IMF to get out of the lending business, its impact could be felt by some buyers and sellers of bullion worldwide as a large amount of gold is reintroduced into the market.

Worth nearly $7 billion at today’s spot price of $1,115.60, this government-certified gold could have an affect on the balance between supply and demand, and the price of gold. For this reason the IMF claims that it will be makes sales in phases, in order to eliminate disruptions in the worldwide supply. This sale would be a second phase to the IMF’s liquidation plan, with 200 tons sold to India and 12 tons combined being sold to Sri Lanka and Mauritius in the fourth quarter of 2009.

“We still need to see what happens to the gold price during the second half of the sale before we can conclude that we have additional revenues. The initiation of on-market sales does not preclude further off-market gold sales directly to interested central banks or other official holders,” said Andrew Tweedie, the IMF Fund Director

Although it shouldn’t have a significant impact on most people, investors will want to monitor this situation as it unfolds. Temporary fluctuations in price are likely to occur as sales are announced; meaning that people looking to buy or sell certified gold will want to plan around any movements by the IMF. 

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Stewart Lawson

Senior Staff Writer - Certified Gold Exchange