Gold slips on IMF sales news

LONDON – Gold slipped towards US$1,100 an ounce in Europe on yesterday after the International Monetary Fund’s announcement that it was opening up a planned sale of 191,3 tonnes of bullion to the open market, and as the dollar strengthened.

The IMF said it will soon begin sales of the remainder of the 403,3 tonnes of bullion it approved for sale in 2008 on the open market.Earlier sales have been made off-market, most notably to India, but also to Sri Lanka and Mauritius.Spot gold was bid at US$1 103,90 an ounce at 1013 GMT, against US$1 106,00 late in New York on Wednesday. In that session gold touched a one-month high of US$1 126,85 an ounce, while euro-priced gold hit a record 823,04 euros an ounce.The IMF announcement and dollar strength have since pressured prices from those highs. Analysts say the fact the gold has not been snapped up by central banks since it became available for sale could weigh on sentiment.’Since India bought a big chunk of gold in October last year, (the gold) has been out there for sale and nothing has happened,’ said Saxo Bank senior manager Ole Hansen.’It could be viewed quite negatively that central banks, who obviously would have been favoured as buyers for the remaining gold, have found current (price) levels unattractive,’ he added. ‘That has put the market a bit under pressure.’The IMF said the open-market sales ‘will be conducted in a phased manner over time’ to avoid disruptions to the gold market. The Fund added that the door was still open for central banks to keep buying gold directly from it.Sri Lanka’s central bank governor said his bank was unlikely to buy more gold from the IMF right now as the island nation has already reached its required reserve level.Analysts added that the downward price move in gold yesterday morning has been relatively subdued, given the metal’s hefty gains earlier in the week. – Nampa-Reuters