RECORD PRICE OF GOLD

Hawera Star, Volume LIV, 2 March 1935, Page 5

RECORD PRICE OF GOLD

Fall in Sterling Attributed; fa. Nervous Selling by Foreigners NO CAUSE FOR ANXIETY BUYING POWER STEADY

(British Official Wireless.) Received 1.30 p.m. to-day. RUGBY, March ,1

As expected, gold reached a;, new. high record to-day- when ■ there; was an increase of Is to 145 s Id.

The Chancellor of the Exchequer, answering a question in the House of Commons yesterday, emphasised "that the external or gold value of sterling was a very different thing from its internal purchasing power. He held out no promise of an early stabilisation of the pound, and refused, as a matter of political policy, to give any account- of .the -operation of the exchange equalisation fund. Newspapers attribute the present high value of gold to the exceptional demand on the Continent, pointing out, that despite the fall in the pound, Britain has been free from the consequences attending currency depreciation elsewhere. The cost of living,- instead. of rising as in. countries pursuing ah inflationary policy, is, in fact, to-day lower than it was in 1931. Among reasons for this are the balancing of the Budget and the establishment of a better trade balance. In a leading article on national accounts, with special reference to the estimates issued yesterday, The Times states that revenue returns to date show it would not be difficult to end the present year with a modest- surplus. The fall in the value of sterling, in terms of continental gold . currencies, is attributed in parts.to the nervous selling bY foreigners, winch continued to-day, but the position is viewed with equanimity in the city,. This is reflected in the - stock.-markets, which maintain a cheerful appearance and, to-day, -a.part from a fresh ..stimulus’ which, .was,, given, to. fhe demand for gold shares following the advance in the price of gold, a feature of the markets w-as the good buying of : home industrials, while -gilt-edged, securities were quoted at satisfactory prices.. Like other the -Evening Standard has approved the attitude of the authorities, w r ho, it says, -have preferred to let the present movement work itself out rather than cheek it by the operations of the exchange equalisation account. The Standard says that in Britain there is neither nervousness nor cause for- nervousness in the situation, the stock markets are in a healthy condition, the British trade returns are promising, industrial production is flourishing, ..the internal price level *is steady and the internal value of the pound;remains high. Speaking at the annual meeting of the London-Midland-Scottisli Railway, the chairman, Sir Josiah Stamp, reviewing the general outlook, said it was clear that at the turn of the year there had been, a. distinct check.in the process of recovery. On the other hand exports in December to January showed a marked advance, and there was great activity- in- constructional industries, but international trading and the monetary situation continued to be most discouraging and left, the countrv dependent still upon.a domestic revival. As a result of all,these factors it- seemed -that Britain. JJltght well hope to hold the-present position and, indeed, make some fair advance upon it, but it was unlikely that there could be any spectacular leap forward in the near future. . ;