IMF to sell off £5.5bn of gold as price hits a peak

The International Monetary Fund is proposing to sell 403.3 tonnes of gold for about $11 billion (£5.51 billion) as part of a wide-ranging financial overhaul.

The fundraising plan, unveiled by , managing director Dominique Strauss-Kahn, comes with gold soaring as investors seek a safe haven. Gold futures jumped sharply overnight to around $926.80 an ounce as oil rose above $109 a barrel.

Proceeds from the IMF sale would partly finance a proposed expansion of the fund's investment strategy, requiring a charter amendment that would need laws passed in most of the 185 member countries, the IMF said in a statement.

Gold is up 9% this year and is worth more than three times the $275 an ounce Gordon Brown got for the 395 tonnes of British gold reserves he sold off in 2002 at the metal's lowest price in 25 years.

Under the IMF proposal an endowment would be created with the sale of the gold, an IMF official said. In all, the IMF holds 3217 tonnes of gold stocks. Approval of the US Congress will be needed before any gold sales could begin.

The gold would be sold on the market or offered to central banks to acquire at market prices.

Sales would be co-ordinated within an existing European central bank gold agreement, which allows for the sale of about 500 tonnes of gold a year.