The astronomical leap in world gold prices gave a boost to the United States Treasury's monthly gold sale on Tuesday (18 September).
(Irving R.Levine) GV AND ZOOM IN of United States Treasury
SV Police at doorway to auction with sign reading "gold sale"
SV Perspective buyers (2 SHOTS)
AV Fort Knox (2 SHOTS)
CU AND SV Gold bullion (3 SHOTS)
GV Doorway to Fort Knox U.S.
SV ZOOM IN UK gold bullion dealers fixing price of gold in London
SCU Mr. Jack Spall managing director of one of five companies responsible for fixing the price of gold in London being questioned and answering in English
LEVINE: "The biggest seller of gold in the world today was the United States Treasury. Twenty-three tonnes in its regular monthly action. Messengers made last minute calls to their offices before handing in sealed bids, mainly from European banks. The U.S. began monthly sales of gold from Fort Knox two years ago. The purpose--to flood the market with gold and knock down the price because when gold goes up, the value of the dollar drop. That makes imports such as oil more expensive for Americans. But that hasn't worked, gold has kept going up anyway. A year ago the U.S. sold gold for 213 dollars (one hundred ponds sterling) an ounce (28 grams). Six months ago 241 dollars (114 pounds sterling), today almost 378 dollars (180 pounds sterling) an ounce (28 grams). Altogether the gold the U.S. sold earlier would now be worth about a billion dollars (450 million pounds sterling) more if it had remained in Fort Knox."
REPORTER: "Mr. Jack Spall, you're one of the managing directors of the biggest bullion dealers in the world, what do you say of the position of gold at the moment?"
SPALL: "Well, certainly we are seeing very volatile positions at the moment, we've seen very sharp movements indeed during the day with a record fixing this morning and then losing about seventeen dollars (seven pounds sterling) before the fixing, but then a very good fixing again this afternoon, although down from the morning. And it looks as though gold is still wanted. It seems to be rather the question of the overall worry and concern about inflation that exists throughout the world and the possibility perhaps of currency problems to come."
REPORTER: "What do you think about the American situation? Has that got anything to do with the price of gold do you know?"
SPALL: "The american situation, you mean the problems they are suffering at the moment through a threatened recession. Yes I think it probable doe, because it does mean that people are slightly worried about the strength of the dollar over the next few months."
REPORTER: "How long do you think this will carry on sir?"
SPALL: "It's impossible to say at the moment. I would have expected that it would have gone fairly quiet today after yesterday's sharp movement up and certainly we did see a drop down, but the activity still seems to be there, so I should think we will probable see it for a few more days at any rate."
REPORTER: "And gold is still the big currency or the big commodity that everybody wants."
SPALL: "It seems to be so at the moment, yes."
REPORTER: IRVING R. LEVINE
Script is copyright Reuters Limited. All rights reserved
Background: The astronomical leap in world gold prices gave a boost to the United States Treasury's monthly gold sale on Tuesday (18 September). The U.S. Government sold gold at a record price as the value of the precious metal soared to its highest level ever in major world financial centres. NBC's Irving R. Levine reports: