Central Banks Continue Snapping Up Gold, Sri Lanka Buys 10 Metric Tons From IMF

Showing the continued willingness of central banks around the globe to diversify into told, the International Monetary Fund (IMF) today announced the sale of 10 metric tons of gold to the Central Bank of Sri Lanka.

The sale was conducted on the basis of market prices prevailing on November 23, 2009 with proceeds equivalent to US$375 million.

This transaction is part of the total sales of 403.3 metric tons approved by the Executive Board in September 2009, and it adds to the total of 202 metric tons already sold to the Reserve Bank of India and the Bank of Mauritius.

Earlier today, reports surfaced that India's Central Bank wants to buy more gold from the International Monetary Fund (IMF).

Many investors have been gaining exposure to gold through ETF SPDR Gold Shares (NYSE: GLD) or through the miners as represented by Market Vectors Gold Miners ETF (NYSE: GDX), which seeks to replicate the price and yield performance of the NYSE Arca Gold Miners Index. Top holdings of the index include Barrick Gold (NYSE: ABX), Goldcorp (NYSE: GG), Newmont Mining (NYSE: NEM), Kinross Gold (NYSE: KGC), and Yamana Gold (NYSE: AUY). There is also a new gold ETF - ETFS Physical Swiss Gold Shares (NYSE: SGOL) - that traders are starting to use.

Gold has been stronger all day. Currently spot gold is trading $1185.50, versus yesterday's close of $1168.20.

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