IMF SELLS 200 TONNES TO INDIA

       The International Monetary Fund recently sold 200 tonnes of gold to the Reserve Bank of India for US$6.7 billion (Bt224 billion), its first sale of the precious metal in nine years.
       The transaction, which involved daily sales from October 19 to last Friday at market prices, is in the process of being settled, the IMF said yesterday in a statement.
       The average price in the sales to India was about $1,045 an ounce, an IMF official said on a conference call with reporters. Gold for immediate delivery rose in Asia, approaching a record $1,070.80 an ounce.
       "The most important thing is that people want gold even at these prices," said Ghee Peh, head of mining research at UBS in Hong Kong.
       "There's good support for prices for now" from the IMF's disposal of bullion, he said.

       ASIAN DIVERSIFICATION
       The sale accounts for almost half of the 403.3 tonnes the Washington-based lender in September agreed to sell as part of a plan to shore up its finances and lend at reduced rates to low-income countries. Asian nations, which have amassed stockpiles of foreign-currency reserves since the 1997 financial crisis, have shown increased interest in diversifying out of US assets as the US dollar loses value against other currencies.
       Gold for immediate delivery rose 0.5 per cent to $1,064.90 an ounce yesterday morning in Singapore. December-delivery gold jumped 1.1 per cent to $1,065.40 an ounce on the New York Mercantile Exchange's Comex Division, the highest price for a most-active contract since October 23 and approaching the October 14 record of $1,072 an ounce.
       "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.
       "India's purchases are arguably fresh buying, since they were not a presence in the spot market before this."
       Proceeds from the sales and other IMF resources, as well as individual contributors, will help pay for discounted interest rates on loans to low-income countries, the IMF said in July. It plans to grant as much as $17 billion in extra loans to poor nations through 2014. The 403.3 tonnes the IMF agreed to sell amount to one-eighth of its stockpile.
       "This transaction is an important step toward achieving the objectives of the IMF's limited gold-sales programme, which are to help put the fund's finances on a sound long-term footing and enable us to step up much-needed concession lending to the poorest countries," IMF managing director Dominique Strauss-Kahn said in an e-mail yesterday regarding the sale to India.
       China, the world's biggest gold producer, has increased reserves |of the metal 76 per cent to 1,054 tonnes since 2003 and now has the fifth-biggest holdings by country, |Hu Xiaolian, head of the State Administration of Foreign Exchange, said in April.
       The nation may purchase some of the 403.3 tonnes of gold being offered by the IMF, the website Market News International reported in September, citing two unidentified government officials.
       The lender has said it is ready to sell directly to central banks and later make transactions on the open market if necessary. The IMF official yesterday declined to say whether other central banks had expressed interest in purchases.
       The IMF, which has helped shore up economies from Pakistan to Iceland over the past year, has sold gold on several occasions before. The last transaction was authorised in December 1999 and took place off-market between then and April 2000.