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Gold News Flash
4 July 1997
World Gold
Council Statement on the sale of gold by the Reserve Bank
of Australia
In response to requests for the views
of the World Gold Council on the recently announced sale of
gold by the Reserve Bank of Australia, the following statement
is issued for immediate release:
"As producers and holders of gold (both
private and public) are well aware, the gold market in recent
months has suffered severely from concerns about the actual
or anticipated actions of Central Banks in respect to their
gold holdings.
The consequent pressure on the market has diminished
the value of not just public holdings of gold, but the value
of savings of many millions of individuals in countries where
gold plays the key role as a savings vehicle. Countries such
as these are generally characterised by low per capita incomes
and hence the value of gold savings to the individual are
of vital importance.
In addition, the effect on the viability of
gold producers has been severe. These producers play a key
role in many countries in providing employment, taxes and
foreign exchange earnings. Especially important to the respective
economies are the producers of Africa, Latin America and the
Pacific Rim, where gold mining is critical to social and economic
wellbeing.
It is therefore a matter of deep concern to
the Council, which represents producers operating in all of
these areas and who contribute so markedly to national economies,
that the Reserve Bank of Australia has seen fit to sell gold
in such quantities at a time of such global market sensitivity.
This action, as noted, affects not merely the
wellbeing of producing countries in the emerging markets,
but Australia itself. As a leading producer it is now also
suffering the negative impact on employment, taxes and foreign
earnings.
This action appears to have been motivated by
narrow financial considerations. The Australian public needs
to be aware that it will have wider negative consequences
for the Australian economy.
For a leading gold producer to take unnecessary
actions that prejudice the wellbeing of a key sector of its
economy suggests a lack of sensitivity to the factors impacting
the market."
Contact: E.M. Hood, Chief Executive
Officer, World Gold Council, 1 rue de la Rôtisserie, 1204
Geneva, Switzerland. Tel: + (41.22) 311.96.66; Fax: + (41.22)
781.48.24, or by e-mail: bryan.parker@gold.org.
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