HIGHEST YET.

Auckland Star, 2 September 1933, Page 10

HIGHEST YET.

PRICE OF GOLD. EFFECT OF SECURITIES. DEVELOPMENT OF MINING. ■ Gold was sold in London yesterday at [ £6 10/8J an ounce, which is the highest price ever recorded in history. The news was received with considerable interest to-day ill Auckland banking, stock exchange and mining circles, which naturally have been closely following the recent upward movement of gold, and the enhancement in the value of goldmining securities on the local 'change. The achievement of the record price i« attributed to the operation of the law of supply and demand, influenced to some extent, it is stated, by repercussions of what some oversea authorities have described as the "devaluation race" between the United Kingdom and the United States. Low Grade Ores. A further improvement in local goldmining shares is expected as an outcome of the new price for gold, and the effect on business on the stock exchange generally will, in the opinion of Invkers. be healthy. It was explained by one authority that a price of £0 10/81 for gold would encourage the development of the low-grade ores and make the production of gold from them a profitable undertaking. The representative of a mining organisation said that while there was always a chance that the high price of gold would raise the speculative market unduly* there was nevertheless a strong current of evidence in London that investors were beginning to base their operations on the price of gold a long way above £4 an ounce. The high price, he added, would undoubtedly be the means of introducing into New Zealand mining methods that were ong overdue. Whereas the gold dredging industry was born in New Zealand, its advancement had been left almost entirely to other countries. The same applied to the quartz mining industry. Other parts of the mining world had long ago abandoned the practices employed in New Zealand; and if the high price of gold would induce low-grade mining in the Dominion to be seriously tackled, the newer methods must necessarily be introduced.

Tax and Exchange. Another point which is exercising the minds of mining engineers of New Zealand, especially in regard to the appraising of low-grade Mining propositions, is the Government's export tax of 12/6 an ounce on gold. No promise has been given that the tax will be reduced in the event of the exchange rate being lowered. In lowgrade propositions, the engineer mtist base his values on some standard. Under present conditions, he cannot fairly base it on the original £4 gold, because the 12/6 ail ounce tax is then an unfair imposition, probably converting a payable proposition into a losing one. On the other hand, if the engineer accepts £6 as a basis and allows for the 12/6 an ounce tax, and if gold should go back to £4 or the exchange fall, he is left with a false basis of calculation. The opinion was expressed to-day that this matter should be immediately taken up with the Government, which should at least definitely say that the 12/6 an ounce export tax would be reduced proportionately to any fall on the London exchange. "It looks as though the higher price for gold has come to stay," said a wellknown stockbroker. "There has been a steady rise in gold mining shares ever since the price went up to £6 1/, and obviously the new price will further improve their value." The effect on gold buying interests in Auckland will not be noticeable, according to the manager of one firm of jewellers,, who said that most of the old gold available from ordinary channels —heirlooms, antiques, etc. —had ■already been bought up. Recent Movements. The course of the price of gold since July last is as under:— / Per 07,. s. d. August 31 129 7 August 30 12S Si August 29 129 4£ August 28 .... ... 12S 8J August 26 129 4 August 25 .. ■ 1 it! 2 August 24 125 !> August 22 125 3 August 21 ..125 2 August 19 125 0 -August 17 125 3 August 15 124 10 August 14 124 8 August 3 ■ 124 7 August 2 124-3 July 20 124 6 July 11 124 10 July 1 122 41 The price of gold before England went off the gold standard on September 21, 1931, was about 84/10. Gold at 129/4£ (as it was on December 3, 1932) per ounce brings the £1 sterling down to about 13/2.