NEW U.S. GOLD POLICY

Evening Post, Volume CXVI, Issue 103, 28 October 1933, Page 9

NEW U.S. GOLD POLICY

CLOSE STUDY IN LONDON

FINANCIAL COMMENT

(British Official Wireless.) RUGBY, October 20. The new* gold policy of the United States Government is still the subject of close study in city financial circles. Tho immediate effect has been to stimulate the market for South African"- and other gold-mining shares, which advanced substantially in price on the London Stock Exchange yesterday. Renewed firmness was displayed this PSIn other sections of tho stock-mar-kets tiiero is a cheerful tone. Transatlantic stocks are well above parity levels, German bonds aro firm, and French loans' steady. British Government stocks are better, with tho War Loan £101 Is 3d, ex dividend. Lists in connection with £2,250,000 of Government of Southern Rhodesia 3£ per cent, inscribed stock at 98 were closed within iive minutes this morning. "The Timos" City Editor, commenting on the American Government's nefr gold policy, says: "So long as American purchases of gold at tho prices stated by the Reconstruction Finance Corporation are confined to gold newly mined in the United States, the market expects that the American fixation will have little if any effect on tho world price of gold even though the price may at times be above the London price, for in that event tho Government would simply be paying a. bonus to producers. But if the American Government should decide that it is necessary to buy or sell gold in tho world market, then the position would be different. Only experience could show to what extent the world would be prepared to sell gold in exchange for depreciating dollars. "It is unlikely that the American Government would sell sgold, although it has power to do so, since such selling would have tho effect of increasing the demand for dollars. That would cause appreciation in their gold value, which apparently is what the President desires above all-to avoid."