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ominous bad news for gold bulls, page-9

  1. 2,739 Posts.
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    In fact here's the whole report .. not just a snippet.

    note the report says (on the 6th paragraph) sales will be over several years .. so wont amount to much on a yearly basis ..what's 13 mill oz over several years - close to zilch.

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    IMF Board Backs Plan To Sell 403.3 Tons From Gold Holdings


    WASHINGTON -(Dow Jones)- The International Monetary Fund's executive board Monday signed off on a broad financial reform plan that proposes to put 403.3 tons of its vast gold holdings up for sale.

    IMF Managing Director Dominique Strauss-Kahn applauded the board's decision to propose a new framework designed to close a projected $400 million income- expenditure gap within a few years.

    It's "a landmark agreement that will put the institution on solid financial footing and modernize the IMF's structure and operations," he said in a statement, noting that the board agreed on a medium-term budget proposal with sharp spending cuts of $100 million over the next three years.

    Still, the IMF can't kick off its gold-sale program - a key element of the its plan to diversify its revenue stream and boost income - until it receives a green light from the U.S. Congress.

    A senior IMF official confirmed the board can't make a decision Monday to actually start the sales because the U.S. executive director for the fund can't vote for the sales because he doesn't yet have congressional backing.

    Under the plan, the IMF would sell the 403 tons, or nearly 13 million ounces, of gold for about $11 billion over several years, according to the senior IMF official. The IMF official said the fund would keep $4.4 billion on its books and put the remaining $6.6 billion into its investment account.

    Additionally, IMF would coordinate the sales with central banks in an effort to prevent any market disruptions, the official said.

    "Gold sales would be conducted in a transparent manner with strong safeguards to ensure that they do not add to official sales and avoid any risk of market disruption," the IMF said in a notice Monday afternoon.

    While a senior U.S. Treasury Department official has signaled his support for the limited gold sales as a way to ensure the IMF's long-term funding capabilities, it is unclear how Congress will respond. Congress, in 1999, rejected a previous proposal for the IMF to sell gold.

    In addition to creating an endowment from the gold sales, the IMF also plans to expand its investment authority, which is currently very narrow.

    IMF's investment authority would be broadened to enhance the average expected return on the fund's investments and enable it to adapt its investment strategy over time, the IMF said in its notice.

    -By Maya Jackson Randall, Dow Jones Newswires; 202-862-9255, maya.jackson- [email protected]

    (END) Dow Jones Newswires
    04-07-081629ET
    Copyright (c) 2008 Dow Jones & Company, Inc.
 
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