Gold jumps to record on purchase by India
From Surojit Gupta and Lesley Wroughton, Reuters:
The International Monetary Fund has sold 200 tonnes of gold to the Reserve Bank of India for $6.7 billion, quietly executing half of a long-planned bullion sale that has threatened to slow gold’s ascent….
…Although the IMF’s plan to sell a share of its gold holdings in order to increase low-cost lending to poor countries had been flagged for a year before it was formally approved in September, the speed, scale and identity of the buyer were a surprise….
….The market’s focus has now shifted to China, which has reportedly been in talks with the IMF about buying some of the fund’s bullion as Beijing seeks to shift some of its more than $2 trillion in foreign exchange reserves away from the U.S. dollar….
Already the world’s top producer of gold and rivaling India as a consumer, China revealed this year that it had quietly lifted its own government holdings of gold stocks to 1,054 tonnes from 600 tonnes when it last reported its holdings in 2003.
200 tons is decent chunk. I’ve seen varying estimates, but according to Peter Bernstein, the total supply of gold is 125,000 tons. That puts this single purchase at about two-tenths of one percent of the total.