OWN CORRESPONDENT, New York | Monday
SOUTH African gold producer Anglogold is to boycott this week’s Bank of England gold auction, which it says is likely to receive an “unenthusiastic” response from the marketplace.
Echoing the sentiment of many other gold market industry players, AngloGold marketing executive director Kelvin Williams described the auction format as an anomaly and a disruptive force in a liquid, traded market.
He predicts the reception will be similar to the market’s lacklustre response to the Bank’s July gold sale.
The auction method elicited a lukewarm response at the July 12 auction, when the bank sold 803600 ounces.
The UK treasury auctioned gold at $279,75 an ounce, about $3 under the London AM fix of that day.
The auction also attracted less interest than previous auctions and was only 1,3 times oversubscribed.
“I suspect the London market will be as unenthusiastic (at the upcoming auction), but that remains to be seen,” Williams said.
The UK treasury announced on May 7 that it is to sell about 125 tons of gold in a programme of five 25-tonne auctions during the year in July, September, November, January and March.
It plans to sell a total of 415 tons, reducing its reserve to 300 tons.