It would beof interest for china to dump 6 or 7 billion US dollars for the balance of the IMF gold. this could result in gold going higher and the US dollar going even lower!!!

Bliz (see below from WSJ)

A senior finance ministry official said the central bank may seek to buy more gold from the IMF directly. "It makes sense to buy gold as it will appreciate more than the U.S. dollar," he said.

News of the purchase of nearly half of the 403.3 metric tons of gold earmarked for sale by the IMF boosted gold prices, reminding investors that central bank reserve diversification will continue to fuel demand for the metal.

In late morning in New York, gold for December delivery on the Comex division of the New York Mercantile Exchange was up $22.90 per ounce, or 2.2%, at $1076.30.

The off-market deal also reinforced the view that little or none of the IMF gold may eventually reach the open market, limiting the bearish impact such a big sale might have had otherwise.

The Reserve Bank bought the gold between Oct. 19 and Oct. 30, an IMF statement said. The $6.7 billion in proceeds from the sale indicate an average estimated price of $1,045 a troy ounce, far higher than the $850 per ounce the IMF expected to get a few months ago, when its executive board approved the sale.

Sue Trinh, currency strategist at RBC Capital in Sydney, said the announcement supported the view that central banks are looking for ways to diversify their reserves away from the dollar.

The Reserve Bank is "still a buyer at current high-price levels, indicating gold is likely to move up further," said Kunal Shah, an analyst at Normal Bang Commodities in Mumbai. "This is positive."

The IMF declined to comment on buyers for the remaining amount, but said it is still in "an initial period to sell gold directly to central banks and other official holders that may be interested in such sales."

There has been speculation that Chinese and Russian central banks may also be interested in buying gold directly from the IMF. Open-market sales will be conducted only if any gold is left after the "initial period" and "the Fund will inform markets before any on-market sales commence," the statement said.

Janet Kong, managing director at Goldman Sachs's commodities investment research division in Hong Kong, pointed out that central banks,once a source of concern to gold bulls as they sold their reserves of the metal, have become net buyers, and exchange-traded funds have become big buyers as well.

"Gold's investor base is broadening, which is positive for gold," Ms. Kong said.

Gold holdings in the SPDR Gold Trust, the world's largest gold ETF, have reached 1,103.52 tons, making SPDR the seventh-largest gold holder in the world.

"Diversification has been an ongoing story for Asian central banks, and gold is one of the possible diversifiers. Gold holdings in comparison to dollar holdings are low," said Justin Smirk, a commodity analyst at Westpac.