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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Enigma who wrote (36555)	7/5/1999 3:54:00 PM
From: John Hunt	Read Replies (1) \| Respond to of 116756

B of E Auction DD, I am quite sure the auction is tomorrow. If I see a link that shows the time, I will post it. Here it is ... in the link I posted this AM. << At around 12.15pm tomorrow the Bank of England will announce the result of the UK's first gold auction >> ft.com John

To: Enigma who wrote (36555)	7/5/1999 4:38:00 PM
From: Tomas	Respond to of 116756

Going cold on gold - BBC, July 5 Gold is no longer an attractive proposition for some countries Everything King Midas touched turned to gold. These days, he might be happier with a palace full of high-yielding government securities. The fact is that gold is no longer the sound investment of common perception. The UK Government has clearly realised that, and on Tuesday it is holding the first of a series of auctions to shed more than half of its gold reserves. The UK's decision has not helped those who still put their faith in gold. Since the announcement of the auction plan in May, the price has fallen by 10% to hit a 20-year low. An ounce of gold currently fetches around $262, a far cry from the early 1980s when it was more like $800. Low inflation over the past two decades has reduced gold's value as a hedge and made stocks and bonds more attractive. Gold's traditional role, as a permanent store of value in times of crisis, is seen as less relevant today. And that is not just the view in the UK. Belgium, Argentina and the Netherlands have unloaded gold reserves in recent years. Switzerland is also planning a big sell-off, and the International Monetary Fund is to sell 300 tonnes of gold to finance debt relief for poor countries. Gold 'good for the long-term' But there are those who believe that gold still has an important function as an investment tool. Among these so-called goldbugs is the World Gold Council, which represents producers and suppliers. It argues that gold reserves build public confidence; over the very long-term, gold has a history of maintaining its value; and a country's reserves should be diversified to minimise risk. The WGC recently took out adverts in several UK newspapers, and reported a big response to its call for the government to hold on to its gold. "It underlines the fact that the vast majority of the UK's citizens do not want the government to sell Britain's gold reserves, which are the rock upon which this country's economy rests in times of crisis," said the WGC's chief executive, Haruko Fukuda. But amid the talk of how wealthy nations should structure their reserves, there is also a real fear that it might be the poorer countries which suffer. The South African president, Thabo Mbeki, said his country's gold mining industry - the world's biggest - was already being affected. Sustained low prices could put 80,000 jobs at risk. He was also critical of the IMF's sell-off plan. "We do not believe that it can be correct that we seek to solve one problem by creating another focused on undermining our efforts at strengthening our growth and development capacities," said Mr Mbeki. However, on Monday the head of the IMF, Michel Camdessus, moved to reassure Mr Mbeki. "We're selling 10% of our gold. That means we're keeping 90% of our gold and we have no desire to see our remaining 90% losing any of its value," said Mr Camdessus. "So we won't be so stupid as to sell the gold in a disordered and unplanned way which risks depressing further an already depressed market." Jewellery in big demand But while central banks are rethinking their gold strategy, it is still in demand for jewellery. Ten years ago, less than two-thirds of the world's gold was made into jewellery - now the figure is more than three-quarters. The biggest market is India, where gold is a traditional way of keeping life savings. It is estimated that 500m Indians own some gold - about 7% of the world's stock. In the first quarter of 1999, though, demand was down by 24%. This is explained by the exceptional levels of 1997 and 1998, following the government's liberalisation of imports. But can the cultural imperative to acquire gold over-ride the current slump in gold prices? Will there come a point when even a nation obsessed with gold realises it could be in long-term decline, and that there might be no cyclical recovery? Central banks such as in the UK are clearly convinced that it is time to restructure and swap gold reserves for a mix of currencies. The goldbugs, however, are still talking it up, despite the long slide over the past few years. "A portfolio without gold is a luxury you can no longer afford," proclaims one of the World Gold Council's latest adverts. But many dealers and observers are coming round to the belief that the prized metal, with all its mystical and mythical associations, might soon be traded just like any other, less lustrous, commodity. news.bbc.co.uk