Back on the subject of POG. Wonder when they'll start buying back. Story:
<<Chancellor under attack over sale of gold reserves
Source: Independent - London
Publication date: 2002-05-26
Gordon Brown has "lost" over pounds 400m by ordering the sale of part of Britain's gold reserves by the Bank of England.
The Chancellor's handling of the economy was under attack yesterday as figures showed Britain came close to recession in the first quarter of this year, throwing his forecasts for growth into doubt.
Figures obtained by the Independent on Sunday also show that his decision to order the Bank of England to part with some of its gold reserves and switch into the euro and yen was also not a good bet for the taxpayer. The value of gold has soared on the world markets as investors have switched to gold.
However, figures issued by the Treasury last week showed that the Bank has lost out to the tune of $578m. Treasury minister Ruth Kelly said the Governor of the Bank, Sir Edward George, had sold 395 tonnes of gold as part of the restructuring of the United Kingdom's foreign currency reserves since May 1999. The last auction was in March 2002 when the price of gold was $296.50 per ounce. Gold was trading at $320.5 in London when the markets closed on Friday.
When the Chancellor announced the policy in 1999, he said he wanted to diversify our store of wealth. Germany, Australia, Switzerland were among the major holders of gold who were also selling. They agreed in September 1999 to limit sales to 400 tonnes a year in total until 2004. Gold prices started rising after 11 September.
As the markets remained uncertain, the gold price continued to rise and has been above $300/oz for three months, a 20-year record. Analysts expect gold to stay above $300 for the rest of this year.
Tory shadow chancellor Michael Howard said: "This episode sheds new light on Gordon Brown's so-called reputation for competence. This is an example of gross incompetence which has cost the British taxpayer dear."
He said the decision to buy the euro and the yen, which had both fallen in value, was also incompetent.
Publication date: 2002-05-26 |
