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Gold Trades Near Record as Indian Central Bank Buys From IMF
November 3, 2009
Nov. 3 (Bloomberg) -- Gold traded within 0.5 percent of a record after India's central bank bought 200 metric tons of the metal from the International Monetary Fund, heightening speculation of more central bank purchases.
"It's positive in many ways because it suggests central banks rather than being net sellers are now looking at becoming net buyers," said James Moore, an analyst at TheBullionDesk.com in London. "It's a surprise because everybody was talking about China being the buyer."
December-delivery gold climbed as much as $12.90, or 1.2 percent, to $1,066.90 an ounce on the New York Mercantile Exchange's Comex division. The record was $1,072 an ounce on Oct. 14. Gold for immediate delivery in London slipped 0.1 percent to $1,058.02 an ounce by 9:58 a.m. local time, compared with a record of $1,070.80. Prices rose to an all-time high in gold traded in Indian rupees.
----- India held 350 tons of gold at the end of 2008, making it the 12th-largest government owner, according to the GFMS Ltd. 2009 Gold Survey. The extra 200 tons propels India past Russia into ninth place, according to GFMS figures. India is the largest buyer of gold for jewelry and investment.
Consumer Demand
"You usually associate Indian consumers buying gold more than you do the central bank in India," said Mario Innecco, a broker at MF Global Ltd. in London.
------ The IMF's executive board on Sept. 18 approved sales of 403.3 tons, pledging to avoid disrupting the market. The board last year endorsed the sale, about one-eighth of the organization's total stockpile, as part of a plan to shore up its finances. China increased its gold reserves by 76 percent since 2003 to 1,054 tons, the official Xinhua News reported in April.
"This is positive for the gold market, as bilateral sales which avoid the open spot market will avoid adding to marginal physical supply," said David Barclay, a commodity strategist with Standard Chartered Bank in Hong Kong.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=av7oJp_8Dtys
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