Kitco/Anna Golubova
IMF not planning to sell its gold for debt relief: ‘Gold reserves provide fundamental strength’

There is pressure building on the International Monetary Fund (IMF) to sell some of its gold to provide debt relief for poorer nations.

Growing debt concerns have been gaining attention as countries struggle to support their economies amid the coronavirus pandemic. The topic was one of the top items discussed during this week’s IMF annual meetings.

The Jubilee Debt Campaign (JDC) is using this as an opportunity to urge the IMF to start selling some of its gold to provide debt relief for the world’s struggling nations. According to the JDC’s press release published on Monday, gold sales could provide much-needed help to underdeveloped countries struggling with the COVID-19 pandemic.

It all comes out to the numbers, according to the JDC. Gold spot prices rose from $1,500 an ounce to $1,900 an ounce this year already, which means that the IMF’s total gold reserves of 90.5 million ounces are now worth around $175 billion. This is around a $38 billion increase in value.

However, despite the call, it is looking very unlikely that the IMF would be willing to sell any of its gold reserves, especially during such uncertain times.

“The IMF has no plans to sell gold at this time,” The Guardian quoted IMF spokesman Gerry Rice as saying. “Gold reserves provide fundamental strength to the IMF’s balance sheet, enabling the Fund to lend safely and at low cost to its member countries. This is particularly important at present, when the IMF is undertaking exceptionally large support for its membership, including its poorest member countries, in the context of the Covid-19 pandemic.”

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Marketwatch/Myra P. Saefong and Mark DeCambre
Gold settles back above $1,900 an ounce

Gold futures finished higher on Wednesday to recoup much of their loss from a day earlier when bullion sank below a psychologically significant level at $1,900 an ounce.

The precious metal recouped some of its recent losses “in response to a decline in the U.S. dollar and anticipation there will be no stimulus before the U.S. election,” said Jeff Wright, executive vice president of GoldMining Inc.

The U.S. dollar continued to trade lower even after the better-than-expected U.S. producer-price index number. The PPI jumped 0.4% last month,

Weakness in the currency provided support for dollar-denominated gold prices. The ICE U.S. Dollar Index DXY traded down 0.2% in Wednesday dealings.

The dollar also saw pressure in the wake of comments from Federal Reserve Vice Chairman Richard Clarida.

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Associated Press/David Koenig
United loses $1.8 billion, aims to shift focus to recovery

United Airlines financial hole grew deeper over the summer as a modest recovery in air travel slowed down, pushing the carrier to a loss of $1.84 billion in the typically strong third quarter.

The airline said Wednesday that revenue plummeted 78% from a year earlier. The loss was worse than analysts had expected.

The results from United, and those issued a day earlier by Delta Air Lines, reinforced the damage that the pandemic is doing to a major industry. Seven months into the worst of the coronavirus impact in the U.S., air travel remains down 65% from a year ago.

The decline in lucrative business travel is even deeper.

United executives believe investors are less interested in current losses and more interested in what the airline plans to do to improve its competitive position when travel recovers.

CEO Scott Kirby said the airline has “successfully executed our initial crisis strategy” and is ready to move on.

“Even though the negative impact of COVID-19 will persist in the near term, we are now focused on positioning the airline for a strong recovery that will allow United to bring our furloughed employees back to work and emerge as the global leader in aviation,” Kirby said in a statement. United declined to make officials available to discuss the results before a call with analysts on Thursday.

Chicago-based United began furloughing 13,000 workers on Oct. 1, and several thousand other employees took severance packages to leave voluntarily.

The airline has cut flights more aggressively than some of its closest competitors in a bid to align costs with dramatically lower ticket sales. And United is borrowing billions of dollars from the federal government and private lenders to outlast the pandemic. The airline ended September with $19.4 billion in liquidity.

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