26 February 2010

More Denials on the IMF Gold Purchase by China

No official denial, but lots of doubts.

The whole thing seems odd, from the story to the doubts to the blatant bear raids and price manipulation being conducted almost every day with the New York open around these option expirations on the futures contracts.

Just yesterday we saw rumours floated in the SP futures pits that triggered a striking turnaround in the US stock indices, shortly after Goldman bought a large number of SP futures contracts. When the rumours were proved false, the forced buying continued.

Gold and financial assets in general are becoming even more political than usual. Expect this to intensify as the recomposition of the SDR and the international reserve currency are negotiated this year. The Anglo-Americans are the status quo on this one, and the integrity of their motivations and reports and transactions are definitely on the table.

We may be seeing the next stage of the currency wars that are so many things to different people. But in the end, it involves the artificial control of wealth and transactional flows, as they conflict with public policy and national and private interests.

"China buying IMF gold" story unfounded: author
By Tom Miles and Zhou Xin
Thu Feb 25, 2010 11:24pm

BEIJING (Reuters) - The author of an article that said China had confirmed it would buy 191.3 tons of gold from the International Monetary Fund said on Friday she didn't have official sources for her story.

Nobody was available to comment on Friday at China's State Administration of Foreign Exchange, the arm of the central bank overseeing gold reserves.

The unverified report helped push up gold prices by 1 percent on Thursday, though other commodities fell, under pressure from a stronger dollar. Traders cited the talk about China as a significant factor why gold prices clawed higher.

China has not said anything officially about plans to buy the IMF gold, but there has been strong speculation because of China's $2 trillion reserves and its announcement last year that it had increased its gold holdings by 454 tons since 2003

Rough & Polished, a Moscow-based industry website, reported China had "confirmed its decision to acquire 191.3 tons of gold auctioned by the International Monetary Fund," which helped push prices up on Friday.

Contacted by Reuters, the author of the Rough and Polished story, Nadezhda Shagrova, who works as a tour guide and journalist in Shanghai, said she did not have any official information to back up her story.

"The source for the story? Well, that's been written about in lots of places. I mean, Xinhua news agency wrote about that and other official Chinese sources, lots of them. Why are you asking?"

Told that gold prices were moving on her story, she said: "No, no, there's just no way that could be because of my article."

Wednesday's China Daily newspaper cited an unnamed official from the China Gold Association as saying China was unlikely to buy the gold being offered for sale by the IMF.

(Editing by Clarence Fernandez)