World Gold Council Condemns Latest UK Gold Auction.

Business Editors

NEW YORK--(BUSINESS WIRE)--July 12, 2000

The result of today's auction of 25 tonnes of the UK gold reserves - the seventh in a regular sequence - is a disaster for both the British taxpayer and the international gold market, says the World Gold Council.

"This proves what we have been saying all along," said Miss Haruko Fukuda, Chief Executive of the WGC which is headquartered in London. "The government is engaged in a give-away of one of the cornerstones of the UK's economic sovereignty. Just look at the figures: in the morning's London fix, gold was priced at $282.85 per troy ounce, and the government then sold 25 tonnes at $279.75 an ounce, $3.10 below the fix. The government has lost almost $2.5 million of taxpayers' money in the space of one hour," added Miss Fukuda.

The WGC has long argued that it is wrong in principle to sell off 415 tonnes of the UK's gold reserves, leaving the country ultimately with just 300 tonnes, which will represent just 7 per cent of the country's total reserves. Today's result also demonstrates that the chosen method of sale - via very high-profile auctions occurring at regular, bi-monthly intervals - serves only to depress market sentiment, securing a very poor deal for the Treasury. Other countries that have sold their gold - such as Switzerland and the Netherlands - have opted for much more discreet forms of disposal, through the Bank for International Settlements. If the UK government insists on selling British gold, the UK should follow their example and use the BIS or sell through the London gold fix.