PRICE OF GOLD

Evening Post, Volume CXVI, Issue 71, 21 September 1933, Page 14

PRICE OF GOLD

ALL RECORDS PASSED

DEMAND FOR SOVEREIGNS

United Press Association—By Electric Tele- . tfrapn—Copyright. (Received September 21, 11 a.m.) SHANGHAI, September 20. In consequence of the jump in the price of gold on the fall of the sterling-franc rates, dealers are offering the record price of 31s 5d for sovereigns.

(Received September 21, 10 a.m.) LONDON, September 20. The price of gold is 133s 9d per oz fine, reported to be a record.

The course of the price of gold since July last is given hereunder:— Peroz. b. d. September ]!) 131 9 September 18 131 0 September 16 130 5 September 15 130 5 September 14 129 6 September 13 129 2 September 12 127 7 September 11 128 9% September 9 129 2% September 8 130 11 September 7 131 0 September 6 130 7 September 5 ~ 130 4 September 4 131 0 j ■ September 2 131 3 September 1 W0 8&; August 31 ]29 7 ■ August 30 128 -BVi August 29 129 PA ■ August 28 1^8.8*4 August 26 129 4 August 25 • 126 2 August 19 125 0 August 2 124 3 July 1 122 4*k The price of gold before England went off the gold standard on September 21, 1931, was about 84s lOd.

The rise from the normal level of £4 4s lOd an ounce is attributable to the depreciation •of the British pound . since Great Britain suspended gold payments to balance her oversea accounts, and it has been accelerated recently by a fairly heavy withdrawal of funds from London. When the United States dollar was. "on gold" the price of gold in London was fixed according to the exchange rate on New York, but now that the dollar is "off gold" and the French,franc is the most important currency, which is synonymous with gold, the price: of. gold in, London is fixed according to the exchange rate on Paris. , . , At this time of the year it is usual for heavy payments to be made by Great Britain in Europe and other places, and this demand for francs, coupled with a withdrawal of foreign funds by nervous investors, has raised the cost of franca in sterling. Consequently, as the price of gold in Paris is fixed,at the French equivalent of £4 5s an ounce, and as this sum in" French gold is, .on today's quotation, worth £6 13s 9d in London, the price of gold has risen accordingly. Most observers of the European financial situation are wondering why Great Britain has'not used her exchange equalisation fund to prevent the pound from becoming so cheap in franca. The reason generally given is that both Great Britain and" the United States are seizing this opportunity to see just how far their currencies would depreciate without control of any kind. They may even be trying to force' France off the gold standard so that the rise in world prices may be accelerated for, .under present conditions, France's imports are encouraged, and. her exports'are retarded, and_ this condition could not continue indefinitely. Reference to the relationship ot tne * sterling to the United States dollar and the most recent changes are referred to hereunder.