THIS IS A COMMENT BY JOHN READE, UBS METALS STRATEGIST, and Reuters: This is potentially really bad news for gold market sentiment If the G20 agree to consider selling more than just the 403.3t of gold - as this article suggests that they will - then the full 3217t of gold will be in play. Although technically the IMF can only sell 403.3t of gold into the open market, it COULD sell the balance back to shareholders who could then in turn sell gold into the open market and give the proceeds back to the IMF. Some thoughts 1) it would most likely be done via a CBGA 3 agreement 2) it would be scaled over years 3) It would still need Congressional approval and lots of other approvals from other nations too. 3) BUT WE WOULD EXPECT THE GOLD MARKET REACTION TO ANY NEWS ABOUT MORE THAN 403.3 TONNES OF GOLD SALES TO BE EXTREMELY NEGATIVE and gold could lose 50-100/oz this afternoon The statement will be released before 15:30 UK time Reuters story follows UK TREASURY MINISTER SAYS G20 DISCUSSION ON IMF GOLD REFERS TO ADDITIONAL SALESUK MINISTER EXPECTS G20 ANNOUNCEMENT ON IMF SDR ALLOCATION TO BE "SIGNIFICANT", MORE THAN DOUBLING G20 discussing additional gold sales-UK minister LONDON, April 2 (Reuters) - Discussion at a summit of G20 world leaders about selling International Monetary Fund gold to raise extra funds refers to sales over and above existing plans, a British minister said on Thursday. "What's referred to here is in addition to what has been previously," Treasury minister Stephen Timms told reporters at the summit. A G20 source said earlier there was a reference in the summit communique to IMF gold sales but "the language had not been firmed up" and it was unclear whether it would be separate from the 400 tonnes of gold the IMF committed to sell last year as part of a broader restructuring of its income. Timms said he also expected a significant announcement on IMF Special Drawing Rights. A Russian news agency report said on Wednesday G20 leaders might approve $373 billion worth of IMF SDRs for its member countries. The move could be similar to a central bank printing money to increase the amount of cash flowing through an economy. "The communique will be seen to make announcements about ... SDRs, potentially quite a significant announcement," Timms said. "I certainly expect it to be significant, more than doubling."
