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By Julian D W Phillips

Most commenators we now read are taking the potential IMF Gold Sales as a foregone conclusion, says Julian Phillips of the Gold Forecaster...

But the International Monetary Fund's 403 tonne sale is by no means a foregone conclusion, not with the unknown quantity of the US Congress who are fully aware of just how good an Investment Gold has been and will likely be still to approve the decision with their casting vote. Congress blocked the idea of IMF Gold Sales last time it was proposed, too.

Of greater importance again is the question of how these sales could affect the Gold Price. The answer is exceptionally positive, after we consider the views of the IMF itself on just how the sales will be orchestrated.

For now, the focus is on whether the sales will actually take place. The Executive of the IMF has approved the sale. But the US Congress, if they approve the IMF gold sales, will have to give the nod to 16.83% of the members' votes at the IMF.

Let's next consider the likelihood that the sales will be finally approved what then? Just how will these IMF gold sales move forward in the light of the intriguing statements coming from the IMF's executives themselves?

IMF Finance Department director Michael Kuhn said The gold sales will take some time. First, the Executive Board has just endorsed the proposal to amend the Articles of Agreement to expand the IMF's investment authority. This amendment needs to be approved by the Board of Governors, and then make its way through national legislatures.

It looks as though a year is the shortest time for entry into force of an amendment of our Articles.

The gold sales will be phased to avoid the risk of disrupting markets. So we won't see the full effect immediately, but we estimate that 3 or 4 years from now, we should be back in the black.

As for the modalities of the gold sales, we will either sell to a central bank that is willing to buy gold, or sell in conjunction with the already established official gold sales program the Central Bank Gold Agreement.

We will coordinate with other official holders of gold to sell in such a way that we do not increase the overall amount of official gold sales into the market.