China To Purchase Half of IMF's Gold

China To Purchase Half of IMF's Gold

25.02.2010




World central banks started to increase their gold reserves after prices on gold began to climb in 2001. The IMF sells gold within the scope of a program to diversify sources of income and achieve an increase in lending.

The IMF announced an intention to sell 403.3 tons of gold in accordance with the adequate decision made by the board of directors of the fund in September of 2009. India, Mauritius and Sri Lanka purchased about 212 tons of the amount at the end of 2009. India purchased most – 200 tons.

China’s interest in international trade is connected with the development of the nation’s economy, as well as with the growing consumer demand in the country.

“Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market. China is interested in the development of the domestic consumer market,” the agency reports.

Most of Chinese citizens believe that investing in gold jewelry is a good way to avoid inflation, Rough & Polished agency said.

The IMF has received the profit of $7.2 billion from gold sales. A part of the funds is to be used for crediting poor countries.

RPT-"China buying IMF gold" story unfounded -author



Friday February 26, 2010 10:30:04 PM GMT

GOLD/CHINA-IMF (REPEAT)



BEIJING, Feb 26 (Reuters) - The author of an article that said China had confirmed it would buy 191.3 tonnes of gold from the International Monetary Fund said on Friday she didn't have official sources for her story.

Nobody was available to comment on Friday at China's State Administration of Foreign Exchange, the arm of the central bank overseeing gold reserves.

The unverified report helped push up gold prices by 1 percent on Thursday, though other commodities fell, under pressure from a stronger dollar. Traders cited the talk about China as a significant factor why gold prices clawed higher.

China has not said anything officially about plans to buy the IMF gold, but there has been strong speculation because of China's $2 trillion reserves and its announcement last year that it had increased its gold holdings by 454 tonnes since 2003.

Rough & Polished, a Moscow-based industry website, reported China had "confirmed its decision to acquire 191.3 tonnes of gold auctioned by the International Monetary Fund", which helped push prices up on Friday.

Contacted by Reuters, the author of the Rough and Polished story, Nadezhda Shagrova, who works as a tour guide and journalist in Shanghai, said she did not have any official information to back up her story.

"The source for the story? Well, that's been written about in lots of places. I mean, Xinhua news agency wrote about that and other official Chinese sources, lots of them. Why are you asking?"

Told that gold prices were moving on her story, she said:

"No, no, there's just no way that could be because of my article."

Wednesday's China Daily newspaper cited an unnamed official from the China Gold Association as saying China was unlikely to buy the gold being offered for sale by the IMF. (Reporting by Tom Miles and Zhou Xin; Editing by Clarence Fernandez)

Told that gold prices were moving on her story,

Sureeeeeeeeeee.....last time china said they wanted the IMF gold..prices went up!!! the India purchased it out of the blue....somebody is jacking with the gold prices again...JMO