RECORD GOLD PRICE

Taranaki Daily News, 4 March 1935, Page 5

RECORD GOLD PRICE

DEMAND ON CONTINENT BRITAIN NOT DISTURBED STERLING VALUE’S FALL MARKETS REMAIN STEADY British Wireless. Rugby, March 1. As expected gold reached a new high record to-day when there was an increase of Is to £7 5s Id an ounce. The Chancellor of the Exchequer, Mr. Neville Chamberlain, answering a question in the House 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 the pound and refused as a matter of political policy to give any account of the operation of the exchange equalisation fund. The newspapers attribute the present high value of gold to the exceptional demand on the Continent and point out that despite the fall in the pound Britain has been free from consequences attending the currency depreciation elsewhere. The cost of living instead of rising as in countries pursuing the inflationary policy is in fact to-day lower than it was in 1931. Among the reasons for this are the balancing of the Budget and the establishment of a better trade balance.

In a leading article on the national accounts, with special reference to the estimates issued yesterday, The Times states: “Revenue returns to date show that it will not be difficult to end the present year with a modest surplus.”

The fall in the value <-' sterling in terms of Continental gold currencies, attributed in part to nervous selling by foreigners, continued to-day, but |he 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, a feature of the markets was the good buying of home industrials, while gilt-edged securities were quoted at satisfactory prices. Like other newspapers, the Evening Standard approved of the attitude of the authorities, who, it says, have preferred to let the present movement work itself out rather than check it by the operations of the exchange equalisation account. The 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, the internal price level is steady and the internal value of the pound remains high. GOLD SHARES ADVANCE RUMOURS LOSING FORCE EFFECT UPON STERLING By Telegraph—Press Assn.—Copyright Rec. 6.30 p.m. London, March 2. The meteoric advance in the price of gold has caused the mining share market to become the chief centre of activity on the London Stock Exchange. Each rise in the price of the metal has brought renewed activity, especially in South African shares. The weakness of the sterling had hardly any effect. The political situation, rumours regarding which were the fundamental reasons for the recent weakness of the markets, appears for the time being to be regarded in a more reassuring light. UNITED STATES OPINION HINT OF STABILISATION CURRENCY ; FINDS LEVEL Rec. 7 p.m. New York, March 2. The downward tendency of sterling and currencies joined to it continued to-day in what experts interpreted as a major monetary adjustment. Sterling was quoted at New York at 4.77 3-8, off 4 1-8, and the lowest since November 11, 1933. •

Apparently the market is getting no support from either the British or American stabilisation funds. This inactivity gave rise to the opinion that the authorities were willing for the present at least to allow economic forces to determine the new relationship between the pound and the dollar, possibly as a prelude to stabilisation.