SALE OF GOLD

New Zealand Herald, Volume LXXII, Issue 22094, 27 April 1935, Page 10

SALE OF GOLD

RESERVE BANK HOLDING

DECREASE OF £200,000 HIGH PRICE IN LONDON PROFIT OVER 100 PER CENT For the first time for nearly six mouths a sale of gold, to the value of £200,000, is revealed by the Reserve Bank return for the week ended Monday, April 22. In the statement gazetted yesterday the value of the gold holding is shown as £2,801,731, compared with £3,001,731 at the close of the week before. The last previous sale was recorded in the return for the week ended November 5, when there was a decrease, of £200,000 from the level shown for the week ended October 22.

The transfer of gold from the trading banks to the Reserve Bank in terms of the Reserve Bank Act was completed in the week ended September 10, the level then standing at £4,351,731. f .lhe first sale was' recorded in the return for the week ended October 1, the amount being £500,000. The subsequent disposals, their approximate dates and values, are shown in the following table:— Value Held Decrease SBf? 24 111 October 22 !! ft jgg® November 5 . . 3*22ononno April 22 .. 2.801,731 200,000 The sales to date, therefore, are to a nominal value of £1,550,000. This represents the price at which the gold was taken over from the trading banks, £3 17s 10Jd an ounce in New Zealand currency. The latest London quotation shows gold to be worth £7 4s od steiling per ounce. The decrease of £200,000 in the holding means that the bank has disposed of approximately 51,600 ounces. This should have realised roughly £372,500 sterling, or about £465,600 in New Zealand currency. Thus the profit, which goes to the Consolidated Fund, has been approximately £265,600. Ihe price at which the other sales were made has varied, but it would not be wide of the mark to say that by the disposal of gold shown at £1,550,000 in the balancesheet of the Reserve Bank a profit of 100 per cent has been made for the benefit of the Government revenue. In announcing just before he sailed for England that last financial year closed with a surplus of £1,500,000, the Minister of Finance mentioned profits from (; the sale of Reserve Bank gold as one of the windfalls which caused the Budget forecast to be so substantially bettered. The value of sterling exchange in this week's return, is £417,000 higher than that of the week before. This movement can be accepted as following disposal of the gold in London.