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

To: IngotWeTrust who wrote (10510)	4/23/1998 10:05:00 PM
From: Alex	Read Replies (4) \| Respond to of 116764

Gold loans may leave Bank with bad debts! Excerpted from "The Guardian", Thursday April 23 1998 - Dan Atkinson Speculators and dealers who have borrowed British gold reserves worth as much as 300 million British Pounds Sterling may be unable to repay the Bank of England, industry sources warned last night... One senior industry source warned that some of the nation's gold was now in jewellery form, hanging around the necks of overseas consumers, and could not be reclaimed in a crisis... ...the price has moved up 12% since January and was rising again yesterday. Now speculators... might have to buy more expensive bullion bars elsewhere to cover their debts. Were significant numbers unable to do so the resulting turmoil could threaten London's pivotal position in the international gold market... One source warned that some bullion banks might be particularly vulnerable, as they were in the position of borrowing short-term from the Bank to lend longer-term to speculators, jewellery manufacturers and others. He added that all involved in borrowing from central banks had behaved as if the price would drop forever and that the loans could always be repaid in cheaper gold. It is not known what proportion of Britain's 573 tonnes of gold is on loan, but the international average is about 10% of reserves.