According to the reports, India paid $6.7 billion for 200 metric tons, which is equivalent to $1042 per troy ounce. This is quite a good deal, as it would impossible to buy that amount of gold on the market without driving the price extremely high. On the flip side, this is also a great deal for the IMF, since it would have been impossible to sell those on the market without sinking the price of gold.
I'm guessing that China is now getting quite nervous and is probably looking into snapping the remaining 203 tons on sale...
Nov. 3 (Bloomberg) -- Gold jumped to a record after India’s central bank bought 200 metric tons of the metal from the International Monetary Fund, heightening speculation that there may be more official purchases.
The Reserve Bank of India paid $6.7 billion for the bullion, which it bought from Oct. 19 to Oct. 30. 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.”
Peter Schiff has a video comment on this event.