IMF’s Gold Assets Shrank in April as Russia’s Rose - Bloomberg

http://www.businessweek.com/news/2010-06-30/imf-s-gold-assets-shrank-in-april-as-russia-s-rose.html
Bloomberg

IMF’s Gold Assets Shrank in April as Russia’s Rose
June 30, 2010, 12:11 PM EDT

By Nicholas Larkin

June 30 (Bloomberg) -- The International Monetary Fund’s gold holdings fell by 15.25 metric tons (490,286 ounces) in May, according to figures from the Washington-based lender. Russia’s assets expanded by 22.46 tons.

Reserves of gold at the IMF were 2,951.58 tons at the end of May compared with 2,966.83 tons at the end of April, data on the IMF’s website show. Russia increased holdings to 703.1 tons in May, from 680.64 tons, and has added gold every month since at least February, the data show.

The IMF plans to sell a total of 403.3 tons of gold. India, Mauritius and Sri Lanka bought 212 tons last year and the IMF in February said it would begin selling the remainder on the open market. The combined February-to-May sales would leave about 137.5 tons as of the beginning of last month.

This “is an indication that they will continue to sell the remaining 137.5 tons on-market as opposed to via off-market transactions with other central banks,” said Daniel Major, an analyst at Royal Bank of Scotland Group Plc in London. “Indeed the decline in gold sales from European central banks and purchases from India, Russia and China in recent years demonstrates gold’s growing popularity with central banks.”

Central banks have been adding to reserves and gold-backed exchange-traded fund assets have advanced to a record as investors sought an alternative to currencies and a protection of wealth from Europe’s debt crisis. Gold traded at $1,243.45 an ounce at 4:16 p.m. in London and reached a record $1,265.30 on June 21.

China Reserves

Central banks and governments added 425.4 tons to their holdings last year to 30,116.9 tons, the most since 1964 and the first expansion since 1988, data from the World Gold Council show. Official reserves may expand by another 192 to 289 tons this year, CPM Group, a research and asset-management company in New York, said last month.

China increased its reserves of gold by 454 tons to 1,054 tons since 2003, the Foreign Exchange Administration said in April last year.

--Editors: John Deane, Claudia Carpenter.

To contact the reporter on this story: Nicholas Larkin at nlarkin1@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net.