Commodities / Gold & Silver 2009 Apr 20, 2009 - 12:30 PM

By: Michael_J_Kosares

(excerpt)

As illustrated above, British Prime Minister Gordon Brown's serial attempts to persuade the International Monetary Fund to sell gold have proven to be one of the more reliable indicators of an impending price spike. Over the past decade, Brown has begged, pleaded and otherwise cajoled the IMF no less than four times to sell from its 3217 tonne hoard. Each of the first three attempts were stymied for one reason or another (mostly having to do with reluctance on the part of the U.S. Congress) and each was the harbinger of a major price rally. Brown's fourth and latest attempt to pry metal out of the IMF came during the early April meeting of G-20 in London.

LAST LEG #4 DISCUUSED IN ARTICLE WAS CHOPPED OFF BY AGORA PROGRAM, YOU WILL NEED TO CLICKON LINK BELOW TO SEE FULL CHART

The accompanying chart was last published in April, 2007 just after Brown's third appeal to the IMF and just before the historic price run-up that took gold over the $1000 mark. His initial appeal in 1999 came just prior to the first leg of gold's present bull market which took gold from $280 to $450 -- a 60% gain. The second came just prior to the 2005-2007 price run-up which took gold from $425 to the $650 level -- a gain of more than 50%. The current plan, awaiting U.S. Congressional approval, is for the IMF to sell a 403 tonne tranche involved in credit repayments between 1999 and 2000.

This time around the prime minister's foray into the gold market has run into some unexpected turbulence. China and India, according to a Bloomberg report last week, has requested that the IMF sell the entirety of its reserve, that is, all 3217 tonnes. Given the dire circumstances within the present monetary order, it is not difficult to understand why. Growing official sector gold demand has been one of the more interesting side bars to the current economic crisis. China and India, it seems, have just upped the ante. If potential IMF sales bring to the surface a growing desire by central banks and nation states to acquire gold and in significant amounts, we may be in a whole new ball game -- one that could add to the already notable verticality of the last two legs of the bull market. The Gordon Brown Gold Rally Indicator might once again prove its reliability in 2009, but if so, it could be for reasons that carry much deeper implications for the gold market and world monetary order in the months to come.

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