Cash for Gold: Chinese Style

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Alan Heap @ Citi: The IMF announcement that the fund intends to sell 191t of gold sent a quiver through the market last week. However there was nothing new here. The gold is the residual from the planned sale of 403 tonnes which will partially finance new loans to developing countries…

The bank said that sales would be phased over time. But also kept open the possibility of direct transfers to other central banks…

The PBC [People’s Bank of China] is the most likely central bank buyer. The bank is deeply dissatisfied with the performance of its US treasury holdings and has made clear its intention to diversify including into gold. In November and December the PBC sold USD46bn of treasuries; they must be buying something.

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