From today's Gartman Letter..... (7-30)

"Finally, regarding gold, at least now we know what happened Tuesday and Wednesday: the IMF stepped in with rumours of gold sales once again. According to wire reports now surfacing, the IMF will indeed sell 403 tonnes of gold in the not too distant future and will do so within the confines of yet another European Central Bank gold sale agreement. Mr. Reza Moghadam, the IMF’s Director of Strategy, Policy and Review, said Wednesday that the IMF has “committed as part of our new income model to have that gold sale [which] if done on the markets [will] be done through the central bank sales mechanism.” Mr. Moghadam said that the selling may take two or three years, or it may not; that it may be done through the markets, or it may be done at one time. All we know for certain is that the gold will be sold, and apparently the US has given its tacit approval to the sale, for it requires a vote of 85% of the membership of the IMF and the US has 15% of the voting “stock” as it were.

At least it is good to know why it was that our nose was so badly bloodied in the gold market earlier this week; sort of like asking “Was that a train that hit us?” Now we know what train it was [Ed. Note: Just to clarify, this prospective gold sale of 403 tonnes of gold is a rather small portion of the IMF’s total gold hoard. Presently, the IMF has 3217 tonnes of gold on hand, so this 403 tonne prospective sale is but 12.5% of its total. It will have more for sale if it needs to sell more, although that has not been up for discussion and likely won’t be for many, many years into the future.].

While on the topic of gold sales and the Gold Agreement, we note that only 140 tonnes of gold have been sold thus far this year. Under the agreement, the central banks who had signed on were allowed to sell up to 500 tonnes, and thus with only August and September still ahead, either the pace of selling must be stepped up dramatically… which is not all that likely… or this year’s sales will simply not match that which allowed. This is not unusual, for the signatories to the Agreement did not sell their allotment total in ’08, nor in ’04 either. However, at least then they sold 357 and 385 tonnes respectively. Unless there is a crush of selling between now and the end of September, this will be the lowest sum of gold under the ten years of the two Agreements.