"We are exploring whether there are alternative ways of mobilising IMF gold reserves that would avoid any impact on the gold market and would be acceptable to the IMF's membership and would command the support of congress," a senior treasury official said on condition of anonymity signalling that a policy reversal may be in the offing.

The much-publicised plan to sell gold, initially suggested by Washington, to bailout poor states groaning under huge debts, is unlikely to see the light of the day now. The US has a veto on all major IMF decisions. Under IMF rules, major decisions need 85 per cent of the votes while the US Has 18 per cent. Unlike in the UN Security Council wherefive countries have a veto, in the IMF only Washington has a veto.

Instead of auctioning off 10 million ounces of IMF gold a part of its gold hoard one idea under consideration is that the financial body sell it to rich central banks so that it would not end up being dumped in the market, the Washington Post said.

Another proposal, by congressman Spencer Bachus who is chairman of the House Banking Subcommittee on Domestic and International Monetary Policy, is to return IMF's gold to rich countries such as the US at book value, which is roughly $ 47 dollars and around one-fifth of today's market value.

The rich countries then might give the gold to a trust fund, which would repay poor countries' debts to IMF, giving the gold back to IMF at current market prices. That would mean IMF selling its gold at 47 dollars and buying it back at five times the price.