THE PRICE OF GOLD

Ashburton Guardian, Volume 54, Issue 97, 3 February 1934, Page 5

THE PRICE OF GOLD

A RECORD IN LONDON. INFLUENCE OF AMERICAN POLICY. SOVEREIGNS WORTH 32/-. (United Press Association—Copyright). (Received This Day, 10.10 a.m.) LONDON, February 2. Mr Roosevelt's announcement caused gold to jump to 139 s 6d, the highest price on record. America purchased the entire amount offered, totalling £BOO,OOO. There is great activity in gold mining shares and prices advanced sharply all round. A market sensation was caused by the announcement that the price had been fixed on the basis of the devalued dollar instead of the franc, as hitherto. A. new boom developed, and sovereigns are fetching 325. RESTRICTIONS PENDING.

OPINIONS IN ENGLAND. LONDON, February 2. ' President Roosevelt's proclamation provided the main topic of discussion in the City to-day. It is realised that the full implications of the new policy are not yet known. The opinion was expressed that the solution of many of the present puzzles depends on the nature and severity of the restrictions on gold movements, which, it is understood, are pending. Otherwise the proclamation is welcomed inasmuch as it restores the dollar to a more clearly defined position. EFFECT IN LONDON. MINING SHARES STIMULATED. (Received This Day, 12.5 p.m.) LONDON, Feb. 2. Devaluation of the United States dollar to 59.06 per cent, of gold (old value) and the fixing of the new price for gold at 35 dollars per ounce, which in effect marks the return of the United States to gold, by establishing an international gold bullion standard, continues to be the dominating factor in the City. . ''■ '. The outstanding event to-day was the rise in the price of gold in the London bullion, market by, 4s to the unprecedented price of 139 s6d an ounce. This greatly stimulated the market in, gold-mining shares.—British Official Wireless.

COMMENT BY "THE TIMES." (Received This Day, 12.5 p.m.) LONDON, Feb. 2. Commenting on America's establishtion of the bullion standard, "The Times" expresses the view that the immediate effect is likely to be the loss of gold from gold countries to the United States. This, it thinks, will be the inevitable outcome of under-valua-tion of the dollar, which arises from the fact that the rise in American prices has not been sufficient to offset the depreciation in the dollar. It becomes clear that the President is determined to stabilise the dollar at not less than its present figure. Confidence will be recreated in those quarters where hitherto it has been lacking.— British Official Wireless.

CURRENCY WAR FEARED. BRITISH REACTION WATCHED. NEW YORK, February 1. The Washington correspondent . of the ''New York Times" says that Administration quarters emphasise that the devaluation of the dollar and the other features of President Roosevelt's gold policy are not intended to punish other nations. The viewpoint is expressed that, if the United States is to enjoy prosperity, the rest of the world must also be prosperous. It is now believed that before any conversations are undertaken, even unofficially through central bank representatives, America will first await immediate British reaction to the devaluation of the dollar. In some quarters it is felt that developments will shortly demonstrate whether the British Equalisation Fund will be employed to drive down the pound in relationship to American currency. Such readjustment of the pound's value is considered to be very possible, and will perhaps eventually force France, and other gold standard nations, to abandon that base.

If that occurred, experts believe that the resultant chaos iu international exchange conditions would force the nations of the' world to meet and devise some basis for an understanding. GOLD BULLION BASIS. MR MORGENTHAU EVASIVE. WASHINGTON, February 1. A technical question as to wnether the United States was on a gold basis or not was answered by the Secretary to the Treasury (Mr Henry Morgenthau, junr.,) to-day. "We are on a gold bullion standard, 19.34 model,'' lie said. He refused to discuss the two billion dollar Stabilisation Fund, saying that all its operations would he strictly secret. .The,.total of gold in the Treasury was declared to be 4,029.000,000 dollars at the old value, while the revaluation of the dollar would make a profit of 2,792,000,000 dollars, thus making the value of the Government's gold about 6,800,000,000 dollars.