GOLD HITS US$ 1,190 AS MORE CENTRAL BANKS BUY / FINANCIAL POST ( RECOMMENDED READING )

Gold hits US$1,190 as more central banks buy

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WASHINGTON -- The International Monetary Fund said on Wednesday it had sold 10 tons of gold to the Central Bank of Sri Lanka, using Monday's market prices for the transaction.

In a statement, the IMF said proceeds were equivalent to US$375-million, adding the sale was part of 403.3 tons approved by its executive board in September 2009. The fund has already sold 202 tons of gold to the Reserve Bank of India and the Bank of Mauritius.
Gold hit a record high at just over $1,190 an ounce on Wednesday due to a broadly lower dollar and renewed interest from central banks. Year to date, the metal has risen more than 35%.
The IMF declined to comment on the reports.

The sales are part of plans adopted last year to diversify the fund's sources of income and to increase low-cost lending to poor countries by up to US$17 billion through 2014.

The IMF reiterated it would inform markets before any on-market sales commence, and would report regularly to the public on progress with the gold sales.

© Thomson Reuters 2009