IMF sale to India helps gold leap to new all-time highs

The COMEX December gold futures contract closed up $30.90 Tuesday at $1084.90, trading between $1055.50 and $1087.00

November 3, p.m. excerpts:
(from Marketwatch)
Gold futures hit a new closing high after India’s central bank said it would purchase 200 metric tons of bullion and the dollar, while higher, trimmed its gains. India’s appetite for gold reserves pushed gold higher in European trading and underpinned its advance during the New York session. The early advance helped gold break out of a technical range that has capped action in the past month…more
(from Dow Jones)
The sale alleviated past worries among traders on how the IMF might carry out its planned sales of 403.3 metric tons without adversely affecting gold prices. “Number one, that takes a lot of potential supply off the market,” said Peter Schiff, president of Euro Pacific Capital. “India is not buying that gold to sell it. It’s buying that gold to own it and keep it.” In addition, it shows there is tremendous demand on the part of central banks to increase their gold reserves…more
(from Bloomberg)
It was “the biggest single central-bank purchase that we know about for at least 30 years in such a short period,” said Timothy Green, the author of “The Ages of Gold.” Central banks, the biggest holders of gold, may diversify out of the dollar and buy bullion as ballooning U.S. debt and low interest rates weaken the currency. “It is but a matter of time until China and the IMF announce much of the same,” said Dennis Gartman, an economist and the editor of the Gartman Letter…more
(from AP)
“To see a central bank buy at this kind of level shows there are going to be a lot of other buyers out there,” said David Beahm, vice president of economic research at Blanchard & Co. India, along with China and Russia, had indicated interest in buying gold as a way to diversify their holdings in dollar-denominated assets. Gold rose even as the dollar moved higher against other major currencies in early trading, breaking away from its traditional inverse relationship with the U.S. currency…more
(from Reuters)
The dollar hit a one-month high against a basket of currencies on Tuesday as investors retreated from risk assets before paring those gains. Gold’s sharp rally in spite of a dollar rise showed that strong demand will continue support the metal. The purchase by the Reserve Bank of India underscored gold’s increasing status as an official reserve…more

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November 3rd’s audio MarketMinute