-Caveat Lector-

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http://www.telegraph.co.uk:80/et?ac=001785122525867&rtmo=wsQtQf5b&atmo=ttttt
ttd&pg=/et/99/7/6/ngold06.html

20,000 lodge protests as gold reserve sale begins
By Anne Hyland

HM Government gold auction [28 Jun '99] - Bank of England


THE Government has received more than 20,000 protests against its auction
of gold reserves today amid claims that the decision will cause unemployment
in South Africa.

The Bank of England is to auction 25 tonnes of gold today as part of its plan
to reduce Britain's reserves from 715 tonnes to 300 tonnes over the next few
years. The World Gold Council yesterday said more than 20,000 callers had
protested against the sale.

Some council mining members also suggested the decision to sell the reserves,
which led to the price of gold falling by almost $30 (�20) an ounce, could
force the closure of mines in South Africa. The price of gold, which fell from
$289.25 before the decision to auction the reserves, closed at $263.25
yesterday.

The Government is also facing a legal challenge in the High Court from a
jeweller in Southampton, Kim Rose, who is seeking leave for a hearing to
stop further gold reserve sales and an explanation from the Government for its
actions. The hearing is expected to go before the High Court today.

Mr Rose said the Government was not aware of the action until yesterday
when it was presented with documents from his lawyers. He said: "I didn't
think of doing it until Friday. I thought some bigger government body would
intervene but nobody has done anything about it."

A Treasury spokesman said: 'The Government has adequately explained its
reasons for the sale, which is to re-balance the Bank of England's
portfolio so
a great proportion of reserves are held in currency."

Algy Cluff, chief executive of Cluff Mining, said the Government's actions had
put the industry under pressure, as had the International Monetary Fund's
plans to sell up to $2 billion of its gold reserves to relieve debt in poor
countries.

"We [the mining companies] are among the few organisations actively helping
the Third World," said Mr Cluff, who has operations in South Africa,
Zimbabwe and Burkina Faso. "They're talking about kicking away the
important prop that's holding up the mining sector and that's the gold price,"
he added.

The Bank of England declined to comment.

Michel Camdessus, managing director of the IMF, said that the sales would
be made at the right time and at a "reasonable price" so as not to further
depress the gold price.

At least five gold mines in South Africa have proposed sacking 8,000 miners
because of lower gold prices.

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