Who will buy 200 tonnes of the international monetary funds gold?
When the International Monetary Fund said several months ago that it would auction off 403.3 tonnes of gold, the presumed buyer in most people’s minds was China, which is desperate to diversify its reserves away from U.S. dollars. Instead, it was India that snapped up 200 tonnes from the IMF. So who will buy the rest of the IMF gold? Morgan Stanley analysts Peter Richardson, Jeremy Friesen and Hussein Allidina, said that while China is still the most obvious buyer, it is now the world’s largest producer of gold and can buy its own output. That would reduce its risk of exposure to the “market prices” that India had to pay. “As such, the higher gold prices rise, the less likely China will be interested in IMF gold, in our view, and the less likely the remainder of the sales will be completed ‘off-market’ in 2009-10,” they wrote. “Nevertheless, given the reduced IMF overhang and continuing fiscal and monetary stimulus policies, the [gold] market may rise even without Chinese buying.” The
