IMF has announced sale of 403.3 tonnes of gold worth USD 13 billion on 18 Sep and same is being undertaken under modalities that safeguard against disruption of the global market. This gold is being bought by China and same is a fallout of follow-through of the decisions at the G-20 meeting in London in April 2009 where China, India, and Russia had agreed to buy gold. This is a positive news that China has faith in gold.

However worrying aspect is that gold ETFs have seen some decline in past few weeks and same can be attributed to the fact that some hedge funds may have sold their holdings.

Thus one is at crossroads i.e. whether one buy gold at Rs 16000 levels or not as Chinese are known to dump gold at their country men and this may be a strategy to reduce their official gold holding. One needs to see the rates further as one is getting dichotomous signals in investment for gold.
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