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China Weighs Purchase of IMF Gold

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“I think we should build up more gold with foreign reserves, but when to buy is the key. It’s a good idea if China can buy the gold from IMF at prices well below market level.” The official said he had no idea if the sale would be on the agenda for the G20 summit. “I personally think China should buy the IMF gold. It will help China to diversify its reserve assets,” the second official said. “For the purpose of reserve safety, it is also good to increase the proportion of gold by a suitable amount,” officials say. The estimated $13 billion cost of the is small beer for the Chinese exchequer, with foreign exchange reserves of more than $2 trillion. If it decided to buy the gold, China would be likely to seek a discount for the bulk purchase, since a market sale would put heavy pressure on the price. The IMF has said it will try to sell the gold, one-eighth of its holdings, to central banks. If there are no takers, it could sell to the market, which saw world gold demand of 3,880 tonnes last year, according to World Gold Council figures.
 
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