May 10, 1999
U.K. to Sell Gold Reserves
Gold futures prices on world markets sagged Friday after the United Kingdom announced plans to sell 58% of its gold reserves.
The British Treasury will sell 125 tons of gold in five auctions between now and March 2000, and an additional 290 tons in 2001 and beyond. The U.K. will replace the gold with larger reserves of foreign currencies, which earn higher interest and cost less to store than gold reserves.
Prices on world stock markets fell more than 2% on Friday after the announcement was made, dropping $6.80 on the New York Mercantile Exchange. Shares of gold mining companies also fell sharply. Similar announcements by other European governments who plan to release their gold reserves onto the market have driven gold prices down over the past several months.
- by Stacey King