LOWER GOLD PRICES

Evening Star, Issue 22448, 19 September 1936, Page 13

LOWER GOLD PRICES

FUTURE TRENDS ARE OBSCURE MINING INTERESTS UNEASY The continued fall in the price of gold iu recent weeks has given rise to some speculation regarding the outlook. Mining interests are tiding to decide whether the future trend will be upwards or downwards, and tnere is room for considerable divergence of ° P Xho n present price, about £6 17s 6d, is the lowest for two years. Extreme quotations in the last three years compare as follows; —

The price is fixed by the day-to-day relation of the pound sterling to francs and dollars. .Recently sterling has been appreciating, and the sterling prico of gold has shown & correspond’ ing fall. Should France devalue the franc, it is assumed that the sterlingdollar exchange will become the yardstick. The price, in turn, depends on the United States maintaining its present gold buying rate of Sodol an ounce. . . ~ An appreciable fall in the gold price would deal a heavy blow to expansion in the mining industry, and much of the prosperity which has been built on the higher price would be lost, the effects would be felt severely in the British Empire, which is an important producer. Realisation of this has prompted the belief that Britain will endeavour to hold a price about £7 an ounce. If this is so, the current dedine may be only temporary. Ihe use of the Exchange Equalisation I'und n?ay restore the exchange rates and so reverse the movement.

1934. 1935. 1936. £ s. d. £ s. d. £ s. d'. Highest 7 3 3 7 9 4 7 1 4 Lowest 6 6 8i 6 19 9J 6 17 5J