Treasury rejects plea over gold sales

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THE GOVERNMENT has rejected a plea by the head of the South African miners' union to suspend its auctions of gold reserves, which he said threatened 100,000 jobs.

James Motlatsi, the president of the National Union of Mineworkers, yesterday said that talks with Treasury officials had been fruitless. "I concluded their position was that they had taken the decision in the interest of the British people and they did not care about anything else," he said.

Gold has fallen from $290 an ounce in early May to 20-year lows of around $253 after Britain said it would to sell 415 tonnes over the next few years, and replace its reserves with holdings in dollars, euros and yen.

The NUM and the South African Chamber of Mines claim sustained low prices threaten 100,000 mining or related jobs in South Africa which would affect the livelihoods of 1 million people. Mr Motlatsi said: "The real problem is the perception that reserve banks will ultimately put their gold on the markets sooner rather than later. Because of that the speculators are saying gold is no more the money of last resort and because of this the speculators have ensured the price has troughed."

A British Treasury spokesman said officials had reiterated government policy to Mr Motlatsi, adding that sales amounted to a rebalancing of the UK's reserves portfolio.

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