## Use of Gold Sales Profits - Initial Considerations and Options

_Policy Papers, March 16, 2011_

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## Bibliographic details
- Published: March 16, 2011
- Series: Policy Papers

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### Background and purpose of the sale
- In December 2010, the Fund concluded the limited gold sale (403 metric tons) approved by the Board in September 2009.
- The main purpose of the sale was to generate profits to fund an endowment that would diversify the Fund’s income sources away from lending income.
- The Board agreed in July 2009, before approving the sale, to a strategy pursuant to which resources linked to the gold sale would contribute to boosting the Fund’s concessional lending capacity.

### Key figures and financial outcomes
- Total profits from the gold sale were SDR 6.85 billion.
- The paper focuses primarily on options for use of the windfall profits above a price of US$935 per ounce.
- The US$935 per ounce figure was the average price required to:
  - generate resources for the endowment at the assumed gold price underlying the new income model, and
  - implement the agreed strategy to provide SDR 0.5–0.6 billion in resources linked to gold sales as part of the 2009 concessional financing package.
- The profits significantly exceeded those assumed in April 2008 and in July 2009, reflecting the substantial increase in the market price of gold throughout the period of the gold sales.

### Purpose of the paper and scope
- The paper seeks to provide a basis for initial Board consideration of the use of the profits from the gold sale.
- It focuses primarily on the options for use of the windfall profits above US$935 per ounce.
- The emphasis is on balancing:
  - funding an endowment to diversify income away from lending income, and
  - contributing resources to boost the Fund’s concessional lending capacity for low-income developing countries.

### Relevant subjects (as listed)
- Concessional aid
- Forward commitment capacity
- Fund financial position
- Gold sales by Fund
- Low-income developing countries
- Poverty Reduction and Growth Trust
- Profits
- Resource mobilization

*Source: Use of Gold Sales Profits - Initial Considerations and Options, March 16, 2011*

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## Content in this bundle

- **Use of Gold Sale Profits—Initial Considerations and Options; IMF Policy Papers; March 16, 2011**
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_Source: https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/use-of-gold-sales-profits-initial-considerations-and-options-pp4551_