I found this anouncment in the news today I thought others might find it interesting! http://seekingalpha.com/article/140852-congress-to-approve-imf-gold-sale-this-week?source=yahoo
The article doesn't say the IMF will sell "all" of their gold. It says they are seeking permission to sell some of it, about 13million ounces, which is virtually nothing. The rest is speculation and your thread title is incorrect. Even if the IMF sold "all" of their gold, it would be a temporary one time event. It would also probably help the future gold price because it would eliminate the one remaining gold hoard overhanging the market.
doesn't a lil place like Ft. Knox constitute a potential hoard overghanging the market? China, India & Russia have lots too. Probably others as well. Any of these govts can dump gold on the world market if the price gets high enough, no? P.S. just saw this after sending the above. The IMF does have the third largest gold reserves in the world. http://www.coinlink.com/Articles/top-ten/the-top-ten-largest-gold-reserves-in-bullion/
I would say no. If anything, central banks are beginning to accumulate gold on balance. Why would Russia and China sell gold? To accumulate US dollars? That doesn't seem likely. Ft. Knox hasn't been audited for decades, and it isn't clear if there is any gold there or who owns it even if it is there. Germany recently requested the return of all gold held on account in the US. The days of the major gold sales seem like they are ending.
For the same reason any other seller would: to capitalize on high gold prices. What that price is I dunno, maybe $1200-1300 an oz. would draw alot of sellers. Why would they do this? Well perhaps they don't think Armageddon is right around the corner like some people do. Gold is a cyclical commodity. It goes up; it goes down. Up may be the near term direction, but that may be short lived. Many of these smart central bankers have been through these cycles before.
I liked the last sentence: Disclosure: I am long GDX and GLD options. - I'm gonna look into these myself. Already own AUY, but these may be the way to play gold, which should do well here near term.
Central bankers, of all people, know what can happen to countries with insufficient reserves [e.g., Argentina]. When most currencies around the world are losing purchasing power, central bankers will resort to the time honored tradition of holding gold. I'm sure China is happier with their gold holdings than their dollar holdings. The higher the price goes, the more they need to hold onto it as the only port in the storm of currency devaluations all over the world. Time will tell.
Central bankers are interested in much bigger issues than profiting on gold. Their main focus is the overall health of the particular economy they are empowered to safeguard. Money supply, interest rates, the orderly functioning of credit markets would be their priorities in most business cycles. Gold prices would only interest them if they felt it was a threat to the overall health of the economy..a bubble for instance like the latest debacle that occurred in the real estate market.
