http://www.bloggingstocks.com/2008/04/08/imf-turns-into-gold-trader/
IMF Turns Into Gold Trader:
Posted April 8th, 208 at 5:29 PM by Aaron Katsman
"You know that the rally in Gold has reached bubble proportions when the International Monetary Fund (IMF) announces that they are selling a huge chunk of their gold reserves. The sale of a 12.5% share of their gold position is a big supply that is going to be coming onto the market, and could potentially pressure gold prices.
According to the Marketwatch report: " In a statement on Monday, Managing Director Dominique Strauss-Kahn said the IMF had made "difficult but necessary choices" to close an income shortfall and make the agency more efficient through a "new and sustainable income and expenditure framework."
The sale could generate over $13 Billion."-----------------------------------------------------------------------
My Brief Take - Despite the discouraging tone of the above blog My Long Term (3-5 year horizon) outlook on Gold REMAINS bullish. That being said...I am a lot more uncertain about the short term outlook for the precious metal given the IMF news. This piece of news HAS to be construed as being bearish for current gold holders/investors. Unless mankind is DOOMED to a hell of eternal stupidity (which it very well could be btw given the recent disturbing example of JR. Bush's 8 YEAR PRESIDENCY!), you need to have enough faith in the system to assume that the IMF knows what it's doing. This entity isn't just any seller...this is the International Monetary Fund! For reference's sake, Wikipedia describes the IMF as:
"An international organization that oversees the global financial system by observing exchange rates and balance of payments, as well as offering financial and technical assistance...The IMF describes itself as "an organization of 185 countries (Montenegro being the 185th, as of January 18, 2007), working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty". With the exception of North Korea, Cuba, Andorra, Monaco, Liechtenstein, Tuvalu, and Nauru, all UN member states participate directly in the IMF..."
Bottom line, Given the IMF's VAST set of Resources (Money/capital, Information, 'Collective Intellect') and References (BANKING relationships with nearly 200 countries in the world), I've become incrementally bearish about the NEAR/SHORT term prospects + price direction/trend of Gold. FYI, as of 4/08/08, Gold is trading at $920 an ounce.
*REMEMBER - Gold's had a SOLID run over the past couple of years. The GLD is up 112% from3 years ago today- APRIL 8th 2005! Because of that recent run I would take my time getting fully invested in this volatile commodity. Personally, I like the long term risk/reward offered by Gold at a price of $800 an ounce.
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*Lastly, commodities commentator from TheStreet.com, Simon Constable, believes Gold becomes 'TECHNICALLY' attractive (attractive to 'chart traders'...those traders who closely follow + trade off of historical price patterns/Technical analysis) from a risk/reward standpoint around $750/ounce. Check out the interview for yourself (hopefully the link stays linked to the page with the video interview...I doubt it):
http://www.thestreet.com/_rmswtile/video/strategysession/10411213.html#1486953589
Data Courtesy: Bloggingstocks.com + TheStreet.com.
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