* Investors want gold, not paper currencies
* IMF to start sale of 191.3 T gold to open market
(Recasts, adds comment/detail)
By Jan Harvey and Pratima Desai
LONDON, Feb 18 (Reuters) - Gold jumped on Thursday as
investors shunned paper currencies and piled into gold, while
the market shrugged off dollar moves and news that the IMF would
sell gold in the open market.
Spot gold <XAU=> was bid at $1,116.25 an ounce at 1518 GMT,
against $1,106.00 late in New York on Wednesday when it touched
a one-month high of $1,126.85 an ounce.
After New York opened a flurry of buying pushed the precious
metal up to a session high of $1,116.35 an ounce from an earlier
low of $1,097.80 seen as the market reacted to the IMF news.
"Some people who didn't want to be in dollars, now don't
want to be in euros or yen, they don't want currencies," said
David Thurtell, analyst at Citi. "Gold is liquid, something you
can get your teeth into."
Greece's deteriorating public finances and worries about
sovereign default have hit the euro in recent weeks.
Investors around the world have become more interested in
gold -- seen in the price of gold in euro terms <XAUEUR=R>, at a
record 823.04 euros an ounce on Wednesday.
Gold is used as a hedge against financial turbulence and
inflation. It traditionally has an inverse relationship with
gold -- they move in opposite directions."
The dollar took on a softer tone after data showed an
unexpected rise in weekly jobless claims and higher than
expected January producer prices. [] []
"There were some large volumes waiting for New York to
open," said Walter de Wet, analyst at Standard Bank.
WON'T DUMP IT
The IMF said it would sell 191.3 tonnes of gold to the open
market under a programme approved last year to boost its
resources for lending, a move that has called into question
demand for bullion from official sector buyers. []
"The news isn't bullish, but the overall impact on gold
should be limited," de Wet said. "They are not going to dump it
on the market ... If gold prices come off we might see central
bank interest return."
The fund said the sales, which are part of a programme
launched last year to boost IMF resources for lending, "will be
conducted in a phased manner over time" to avoid disruptions.
It also left the door open for central banks to keep buying
gold directly from it, nearly four months after India's purchase
of 200 tonnes boosted the country's gold holdings to the 10th
largest among central banks.
"The IMF (sales) shouldn't be particularly disruptive," said
Daniel Major, an analyst at RBS Global Banking & Markets. "The
market is expecting at least some of that 191 tonnes to be sold
through off-market transactions."
Sri Lanka's central bank governor said his bank was unlikely
to buy more gold from the IMF right now as the island nation has
already reached its required reserve level. []
Among other precious metals, silver <XAG=> was bid at $16.16
an ounce against $15.84, platinum <XPT=> at $1,527.50 an ounce
against $1,524.50 and palladium <XPD=> at $436 from $433.50.
For a story on Impala Platinum's output click on
[]
For a factbox on central banks' views on gold click on
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(Editing by Sue Thomas)
