China Buying IMF Certified Gold?
Posted by Adam King on February 23, 2010
February 23, 2010 – Although analysts such as Alan Heap from Citigroup Inc have claimed otherwise, the World Gold Council has reaffirmed that China is not “a realistic candidate” to buy certified gold from the International Monetary Fund (IMF). The lender sold 200 tons to India and 12 tons combined to Sri Lanka and Mauritius in the fourth quarter of 2009 and still has about 191.3 tons remaining to sell.
China is buying gold, but not from the IMF. “We’re not surprised to see that China has not” purchased IMF gold, said George Milling-Stanley, managing director for government affairs of the London-based council. It is said that China’s central bank is “deeply dissatisfied with the performance of its U.S. Treasury holdings and has made clear its intention to diversify, including into gold,” according to Citigroup’s Heap. The prevailing opinion is that China will “buy local gold production” to add to its reserves.
While China is not adding from the IMF reserves, governments are looking to buy. “There has been some ill-informed comment that this move tarnished the notion that governments are adding to reserves,” Milling-Stanley said. “There are a lot of central banks out there that are buying local production in local currency. The IMF would have no interest in that local currency. The IMF is looking for dollars.”
For private investors, this talk of governments looking to buy certified gold is an indication of the larger investment climate. As the worldwide economic crisis continues to negatively impact many countries, gold becomes an increasingly desirable commodity for investors.
Senior Staff Writer – Certified Gold Exchange
US Gold Market