London - The U.S. Congress could approve International Monetary Fund
gold sales as early as next week, but that decision shouldn't cause a
drop in gold prices, analysts said Friday.

"This issue appears now fully priced into the gold market and any
announcement confirming sales should not move the market - apart from
perhaps a knee-jerk reaction," said John Reade, an analyst at UBS.

Gold hit a three month high Friday due to U.S. dollar weakness across
a number of currencies such as the euro and pound. Traders and
analysts said the metal is heading towards $1,000 a troy ounce with
speculative buying reentering the market and the dollar weakening.

At 1116 GMT spot gold was trading at $974.90/oz, up 1.7% from
Thursday's close.

The approval to sell gold, along with an increase in U.S. funding to
the IMF, is scheduled for a debate beginning Monday as part of the
2009 Supplemental.

An initial version of the Supplemental, which includes a wider number
of issues such as defense spending, was passed by both the House of
Representatives and the Senate earlier this month.

The version passed by the House didn't include the IMF provision but
the Senate did approve the limited sale as long as it is done in a way
that won't disrupt the market.

Discussions over a final draft between representatives from each house
are due to begin next week with a vote possible by next Friday.

At the G20 summit in London in April, nation participants agreed the
IMF could sell 403.3 metric tons of gold as part of efforts to
leverage up to $6 billion in concessional loans for low-income
countries over the next few years.

In order for the sale to proceed, 85% of IMF shareholders need to
approve the proposal. Since the U.S. has 17% of the votes, it has a de
facto veto over the proposal, which requires Congressional approval,
but IMF Managing Director Dominique Strauss-Kahn told Dow Jones
Newswires this week he expects Congress will soon approve the sale.

"We do not believe the sales, should they occur, will harm gold
prices," said HSBC analyst James Steel.

Other member states must also approve the sales plan, which may take
many months, HSBC's Steel said, adding the sales are likely to be
included in a new Central Bank Gold Agreement, or CBGA. The current
CBGA agreement expires in September and analysts expect a new one to
be announced soon.

Under the CBGA, 17 European central banks agreed to limit gold sales
to 500 tons a year. The pact is adhered to on an informal basis by the
U.S., the Bank of International Settlements and the IMF.