- Press Release
World Gold Council regrets second UK gold
auction
Treasury ignores public opinion
LONDON: 14 September 1999 - The World Gold Council today condemned
the announcement by the Bank of England that it intends staging on 21
September the second of a planned series of auctions of the UK's gold
reserves.
"We deeply regret the fact that the UK Treasury has -
against a welter of public criticism - decided to pursue this policy of
selling some of the country's gold reserves by auction," said Miss Haruko
Fukuda, chief executive officer of the World Gold Council.
"At a time when the International Monetary Fund tentatively
appears to be re-thinking its own plans to sell gold into a weak international
market, because it has seen how damaging this action is to many of the
world's emerging markets' gold producers, it seems perverse of the Treasury
to stick to a policy which undermines not only Britain's economic security,
but which additionally weakens the prospects for growth among many developing
nations," added Miss Fukuda.
The UK government's announcement of these sales on May
7 was followed immediately by a $30 an ounce fall in the gold price which
reduced the value of Britain's total gold reserves by £450 million. The
first of the planned series of gold auctions was staged on 6 July this
year, when 25 tonnes were sold. After that auction, gold prices again
weakened sharply, with gold setting a new 20-year low of $252.20 per troy
ounce on 20 July. The 21 September auction will see a further 25 tonnes
sold, at a time when the gold price remains weak. The stated intention
of the Treasury is to reduce the UK's gold reserves from 715 tonnes (the
position prior to the first auction) to 300 tonnes "in the medium term",
a level of gold reserves which will mean the UK has, in percentage terms,
gross gold reserves equivalent to those of Albania and Papua New Guinea.
At the time of the 6 July auction the WGC conducted a
vigorous publicity campaign to gauge the strength of public opinion opposed
to such sales. Almost 50,000 people from all across the UK have already
registered their protest against the government's policy of selling gold
reserves. The WGC expects that many more will join in the protest as a
consequence of Mr Gordon Brown, Chancellor of the Exchequer, sticking
to this scheme of eroding one of the country's most important long-term
assets.
Contacts:
London
Gary Mead, World Gold Council 0171 930 5171
Keith Irons, Bankside Consultants 0171 220 7477
New York
George Milling-Stanley, World Gold Council 001 212 317 3800
Victor Webb, Marston Webb International 001 212 684 6601
|