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

To: PaulM who wrote (36742)	7/7/1999 12:10:00 AM
From: Enigma	Respond to of 116753

The Times Wed. July 7: July 7 1999 BUSINESS NEWS Protests fail to prevent Bank from sending price to 20-year low Gold slumps after auction THE price of gold plunged to a fresh 20-year low yesterday after the Bank of England's eagerly awaited reserves auction failed to attract a premium to the market price. The Bank received $261.20 an ounce for the 25 tonnes that it put under the hammer, which was in line with the prevailing price when bidding closed at 11.30am. The flat result ended slim hopes that the auction might trigger a buying spree among speculators, leaving the price to slide to a close of $256.85 an ounce - its lowest level since May 18, 1979. It also fuelled fresh criticism of the Treasury's decision to sell more than half its gold inventory as well as its policy of flagging the move two months in advance. Gold companies joined politicians from leading producing nations to call on the Government to postpone the remaining sales. Trevor Manuel, South Africa's Finance Minister, claimed that the British sale, coupled with International Monetary Fund plans to sell gold to fund debt relief, would prove extremely damaging to some of the world's poorest nations. "Too many countries in Africa survive from export revenues, primarily from commodities, and this will impact very directly," said Mr Manuel, who was attending the Southern African Development Community's annual summit in Durban. The gold price has slumped from $290 an ounce since the Government's announcement on May 7 that it would cut its inventory from 715 tonnes to 300 tonnes - wiping about $650 million off the value of Britain's gold reserves. The proceeds from the sales are to be reinvested in currencies such as the dollar, yen and euro. However, the recent decline is still modest when compared with the rapid slide since gold prices peaked at $492 an ounce in 1997. The gold price slump claimed a big victim yesterday when East Rand Proprietary Mines was provisionally liquidated with the loss of about 5,000 jobs. South Africa remains the world's largest gold producer with about 300,000 workers employed in the country's mines. The Bank of England said that it received bids for more than five times as much gold as it was offering in yesterday's sale. However, some bullion dealers believe much of the over-subscription was the result of unrealistically low bids lodged by gold producers who were desperate to create a perception of strong demand for their product. The dealers said that the mining companies were highly conscious of the impact that a poor result could have on the Bank's next auction, planned for September 21. But they said the Bank's refusal to reveal the range of bids, or who lodged them, made the over-subscription figure meaningless. Kamal Naqvi, an analyst with Macquarie Bank, said the market had been braced for a short-covering rally in the event that the Bank had achieved a reasonable premium to the spot price. "The price will disappoint some, mainly because there was so much talk about it being massively over-subscribed," he said. Haruko Fukuda, chief executive of the World Gold Council, which has led the protests against the sale, added: "The market knows there is another 400 tonnes coming." Commentary Next: Dollar's rapid climb continues Copyright 1999 Times Newspapers Ltd. This service is provided on Times Newspapers' standard terms and conditions. To inquire about a licence to reproduce material from The Times, visit the Syndication website.

To: PaulM who wrote (36742)	7/7/1999 12:20:00 AM
From: Enigma	Respond to of 116753

And Australian stocks (Bloomberg): Top Financial News Wed, 07 Jul 1999, 12:02am EDT Australian Gold Stocks Plummet After BOE Sale Pushes Prices to 20-Year Low By Karen Peebles Melbourne, July 7 (Bloomberg) -- The Australian Gold Index plunged as much as 6.6 percent as investors dumped gold stocks after the Bank of England's gold auction pushed the price of the yellow metal to a 20-year-low. The index, which measures the performance of gold stocks on the Australian Stock Exchange, fell as much as 7.55 percent, or 69.50 points, to 851.50. It recently traded at 857.30 The dive in the Australian index was the latest in a world- wide rout of gold stocks that followed the Bank of England's auction yesterday of 25 metric tons at a below-market price. The U.K. auction was the first of several expected before next April, as the bank shifts asset reserves from gold to bonds. Analysts said Australian gold miners producing above the current gold price will have to consider closing down mines. ''There will be so much greater pressure on companies to seriously look at closing operations, and they'll also be asking themselves if they aren't mining gold do you then shut up shop,'' said gold analyst at Bell Securities, Keith Goode. Australia's biggest gold miner, Normandy Mining Ltd., lost as much as 11.86 percent, or 14 cents, to A$1.04. Newcrest Mining Ltd. fell 18 cents or 4.9 percent to A$3.44. Sons of Gwalia Ltd. dropped 20 cents, or 4.6 percent, to A$4.10. Delta Gold Ltd. dropped 9.8 percent, or 23 cents, to A$2.10. ''The gold industry has some real challenges ahead of it and it's a bit hard to see a catalyst to turnaround the market,'' said Richard Fish, who helps manage A$300 million in resource equities at National Australia Asset Management Ltd. Elsewhere, the picture is equally grim for gold producers. Overnight, the Standard & Poor's Gold and Precious Metals Index tumbled 6.7 percent. In Canada, the Toronto Stock Exchange Gold & Precious Minerals Index fell 4.5 percent, while in South Africa, the world's largest gold producer, the Johannesburg All Gold Index lost 2.7 percent. The Bank of England sold its gold for $261.20 an ounce, a 0.4 percent discount on the price when bidding closed, raising $209.8 million for investment in bonds. The U.K. joined Australia, Belgium and Canada in selling the metal in favor of assets with higher returns. In New York and London, gold fell to the lowest closing price since May 1979. Gold for August delivery fell $6.80, or 2.6 percent, to $257.80 an ounce on the Comex division of the New York Mercantile Exchange, the biggest decline in almost two years. In London, gold dropped $5.32, or 2 percent, to $256.85. In Asia trading, gold for immediate delivery recently traded at 257.25 an ounce, up 40 cents. ©1999 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.