The price of gold fell sharply this morning after the United States Treasury said that it backed the International Monetary Fund's proposed sale of about 400 tonnes on the global market, which would be worth around $12 billion (£6.1 billion).

Gold slipped to $930.20 an ounce from $937.80 in late New York trading yesterday, well below last week’s record high of $953.60 an ounce.

The fall was triggered by comments made by David H McCormick, a senior official at the Treasury Department. He said that the US agreed with the IMF that its plan to sell nearly 13 million ounces of gold was "probably the most viable" way of securing the organisation’s long-term funding.

At current prices the sale would raise just under $12 billion for the IMF.

Mr McCormick's remarks were significant because the US Treasury had previously opposed sales by the IMF, the world’s third-largest holder of gold bullion with more than 3,200 tonnes. The IMF has not sold a significant amount of the metal since 2000.

Profit-taking by a variety of gold bulls following last week’s highs amplified the fall, but the downturn in the price attracted some bargain hunters, particularly jewellery makers in the Far East.

Meanwhile, shares of Gold Fields, the South African gold mining group, fell more than 4 per cent on Monday after it said that the country’s acute power crisis could force it to lay off up to 6,900 workers out of a total of 53,000.

In January, state power supplier Eskom suspended electricity for several days at some of South Africa’s biggest mines.

Gold dealers expect the outages to lead to a fall in gold production.

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