Ref 09-BN-003 of 18 Nov, 2009 PDF Download
IMF in Trouble to Deliver 200 tons of Gold to India?
|Mining MX of South Africa has reported and indirectly hinted at the possible trouble IMF may have in delivering 200 tons of gold to India. (Link: http://www.miningmx.com/news/gold_and_silver/global-gold-hedge-heads-below-10moz.htm
Following is the report:
“The biggest seller is the International Monetary Fund, which is disposing of 403 tonnes of gold. It was reported that India had purchased 200 tonnes of gold but by the start of November this sale had not been settled.”
|IMF is based in Washington D.C. in USA (700 19th Street, N.W., Washington, D.C. 20431). According to IMF factsheet it holds Gold as under:
The IMF holds 103.4 million ounces (3,217 metric tons) of gold at designated depositories. The IMF’s total gold holdings are valued on its balance sheet at SDR 5.9 billion (about $9.2 billion) on the basis of historical cost. As of August 28, 2009, the IMF’s holdings amounted to $98.8 billion at current market prices.
A portion of these holdings was acquired after the Second Amendment of the IMF’s Articles of Agreement in April 1978. This portion, amounting to 12.97 million ounces (403.3 metric tons) with a market value of $12.4 billion as of August 28, 2009, is not subject to restitution to IMF member countries (see below), unlike gold the IMF acquired before 1978.
We do not know who are the designated depositories. One could be “Fort Knox” in USA or some other locations in Switzerland, London and other financial centers.
I have already mentioned in my book “Sub Prime Resolved” – Chapter 14 on Gold, the US may have lost almost 90% of its gold by covertly selling or lending to hedge funds which may never come back. These sellers or hedge funds appear to have sold majority of gold below $ 330. If those short sellers were to buyback the shorted gold, there would be huge increase in prices.
It is possible, though not conclusive, IMF is not able to deliver the gold physically because the real inventory at Fort Knox may have been reduced. This could be one of the reasons that IMF may not be in position to deliver the gold in time. If the market gets this hint, the gold prices could pierce through the roof.
|Tiny Mauritius buys 2 tons of gold from IMF
Nov. 17 (Bloomberg) — Mauritius bought 2 metric tons of gold from the International Monetary Fund, underscoring a drive by central banks to boost holdings as the precious metal trades near a record and the dollar slumps.
The $71.7 million sale to the Bank of Mauritius was based on market prices on Nov. 11, the IMF said in an e-mailed statement yesterday. The Reserve Bank of India paid $6.7 billion for 200 tons from the IMF, according to a Nov. 2 statement.
Mauritius buys 2 MT of Gold from IMF
After India, it is Mauritius, not China, to buy gold from IMF
|Mauritius, the pigmy island in the Arabian sea, also surprised the world by buying 2 tons of gold from IMF.
Not very significant quantitatively, but psychologically it will boost the morale of Gold bulls. It shows that Central Banks the world over have turned buyers of gold after a lull of over 3 centuries.
Off Market Deals
All the transactions between IMF and other countries or central banks, are done “off market” at the current market prices. Thus, unless the IMF announces, the world will never know of any major gold deals.
Further, if there is a default in delivery, the world will not know until IMF tells everyone. Had this transaction been done on exchanges, the world would know of non-delivery almost immediately.
This will catch the short sellers by their neck. They thought that IMF proposed sale will be a long time hang over on the market. As result, the prices may turn weak. They thought that gold in that case should falter.
They never thought that visually poor country like India, which never bought even 1 ton of gold, would buy as much as 200 tons of gold from IMF. They also did not think that tiny Mauritius too will join the rank of India.
Who will be the next, is the speculation in the market. It is possible that some middle east countries and oil producers would switch their reserve to gold.
No More Gold at Fort Knox?
This author, in his book “Sub Prime Resolved” has proved that USA appear to have lost most of its gold though hedging and otherwise.
This author has used official figures to prove that “earmark gold” is nothing but the change of ownership of gold from USA to some other countries, possibly IMF and some other countries.
According to this author, the USA has lost almost 6000 to 7000 tons of gold until now. While physical gold may be lying at Fort Knox, the real ownership has shifted from USA to some other countries or organizations, one of whom could be IMF.
Dear investors, brace up for a giant rally for gold! The gold could jump $ 100 in single day.