Britain to sell 150 tonnes of gold in 2000-2001

Britain to sell 150 tonnes of gold in 2000-2001
REUTERS

MARCH 3: The UK Treasury said on Friday it planned to sell 150 tonnes of gold in a series of six auctions starting from May as part of a programme to restructure Britain's reserve holdings.

This set of auctions will follow the final auction in the current series of five sales, which will dispose of a total of 125 tonnes of reserve gold, set for March 21.

"There will be six auctions during 2000-2001, starting in May. As in 1999-2000, the auctions will be of approximately 25 tonnes each, conducted on a single price basis," the Treasury said in a statement.

The gold price lost almost a dollar after the news of the sales and spot bullion was last quoted at $ 287.75/$ 288.50 a troy ounce from $ 288.70/$289.20 just before the announcement.

The Treasury announced its plans to reduce British gold holdings from 715 tonnes to 300 tonnes on May 7 last year, with the proceeds turned into dollars, euros and yen in a move the Bank of England said was to achieve a better portfolio balance.

The Treasury said the sales will continue to be made through Bank of England auctions. The new series of sales is consistent with a pledge by 15 European central banks -- including the Bank of England -- in September 1999 to limit their gold sales to 2000 tonnes over the following five years.

"The UK sales for 2000-2001 are consistent with that announcement," the Treasury statement added. The decision to reduce UK gold reserves sent prices crashing last year, with gold reaching a 20-year low of $ 251.70 in August before recovering to a two-year high of $ 338 early in October after the European central banks's pledge to limit gold sales, lending and derivatives activity.