VALUE OF GOLD

Manawatu Standard, Volume LV, Issue 80, 2 March 1935, Page 7

VALUE OF GOLD

ANOTHER RECORD SET. PECULIAR REACTIONS. NO RISE IN COST OF LIVING. (United Press Association—By Electric Tel egraph. —Oopyrigh t.) (British Official Wireless.) Received March 2, 12.10 p.m. RUGBY, March 1. As expected, gold reached a new liigli record to-day, when there was an increase of Is to £7 5s Id per fine ounce. The Chancellor of tbo 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 the internal purchasing power. He held out no promise of early stabilisation of tile pound and refused, as a matter of political policy, to give any account of tho operation of the Exchange Equalisation Fund. The newspapers attribute tlie present high value of gold to the exceptional demand on the Continent, and point out that despite the fall in tbo pound Britain lias been free from the consequences attending currency depreciation elsewhere. The cost of living, instead of rising as in countries pursuing an inflationary policy, is in fact ‘to-day lower than it was in 1931. Among the reasons for this are the balancing of tlie Budget and the establishment of a better trade balance. THE NATIONAL ACCOUNTS. In a leading article on the national accounts, with special reference to the Estimates issued yesterday, tho Times states that the revenue returns to date show that it will not be difficult to end tho present year with a modest surplus. NERVOUS SELLING. Tlie fall in the value of sterling in terms of Continental gold currencies, attributed in part to nervous selling by foreigners, continued to-day, bin the position is viewed with equanimity in the city. This is. reflected in the stock markets, which maintain a cheerful appearance, and to-day, apart from the fresh stimulus which was given to the demand for gold shares following the advance in the price of gold, the feature of the markets was the good buying of home industrial issues, while gilt-edged securities are quoted at satisfactory prices. SERENITY IN BRITAIN. Like other newspapers, the Evening Standard approves of the attiude of the authorities who, it says, have preferred to let tlie present movement work itself out rather than check it by the operations of the exchange equalisation account. Tlie Standard adds 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, tho internal price level is steady, and the internal value of the pound remains high. THE LATEST QUOTATIONS. Received March 2, 11.5 a.m. LONDON, March 1. Tlie price of gold is now £7 5s Id. The dollar rate of exchange (New-York-London) is now 4.8 the franc on Paris 73 13-~0. ACUTE PROBLEM. THE CURRENCY TRIANGLE. LONDON. March 1. _ The Daily Telegraph’s financial editor says that tlie jarring triangle of the pound-franc-dollar is becoming an acute problem. If the fall of the pound in terms of gold is not arrested, big questions will soon arise. The City is actively debating whether controls at London, ‘Washington, and Paris will be content to leave exchanges to find their own levels. Storing is weak against the dollar because America’s currency is undervalued and there is no free supply of dollars to meet commercial demand. The present strength of the franc reflects the damage done to sterling by the recent unjustified scare on the Continent about Britain’s political and financial position. A further disadvantage to the pound’s position is that it is forced to carry on its shoulders at present a large and important sterling area, a responsibility which at present is a big handicap. The unsettled feeling on the Continent finds expression in ■the demand for gold and hoarders are busy. When they cannot buy gold they buy gold currencies.