Gold price plunges after UK sale

GOLD PLUNGED to a 20-year low after the first auction of UK reserves achieved a price of $261.20 an ounce, below the opening fix of pounds 261.30.

The Bank of England said that although the sale of 25 tonnes was five times oversubscribed, about 100 tonnes worth of bids were below that price. The market price of gold fell more than $5 an ounce to a 20-year low of $256.80. Andy Smith, precious metals analyst at Mitsui, said: "This is not a sexy buy story." Bank Governor Eddie George (above) said the next 25-tonne sale was set for 21 September. But the world's leading gold miners called on Tony Blair, the Prime Minister, to answer rumours that the sales were timed to help out speculative short sellers in the market.