DECISION ON GOLD SALES

Press, Volume CVIII, Issue 31736, 20 July 1968, Page 13

DECISION ON GOLD SALES

(N.Z.P.A.-Reuter —Copyright) PRETORIA, July 19. South Africa has again reserved its right to sell gold on both the official and free markets, in an announcement by the Minister of Finance (Mr Nicolaas Diederichs).

South Africa had “frozen” its stocks of all newly-mined gold since March 17.

This move came after goldpool countries announced that there was sufficient gold in central banks to finance world trade and meet international monetary demands. At that time, the central banks decided to stop supplying the free market in order to halt speculation in gold which was threatening the world monetary system. In a statement after talks between Government finance officials and the South African Reserve Bank, Dr Diederichs reaffirmed his announcement on gold made to Parliament in April last. He said then that South Africa was reserving its right to sell its newly-mined gold on the free market—at whatever price the market reached —as well as on the official market at SUS3S an ounce. Sources said that the talks in Pretoria were called in reaction to the call by the United States Secretary of the Treasury (Mr Henry Fowler) to South Africa last

Monday to resume gold sales on the free market, in order to maintain stable prices in face of heavy demand. South Africa’s statement means that its essential position on gold sales has not changed. Dr Diederichs said he found it “incomprehensible” that the United States and certain other countries should now want to force South Africa to sell its gold on the free market by preventing it from selling to monetary authorities—principally the International Monetary Fund. As he was aware, said Dr Diederichs, the official I.M.F. policy was that gold should retain its rightful position in the international monetary system. But the current moves by the United States and other countries implied that newlymined gold, which should be available to strengthen monetary reserves, would henceforth be artificially prevented from flowing into these channels.

Such a reversal of policy must lead to a weakening of the world’s monetary structure, as well as a total loss of market confidence, Dr Diederichs said.