Gold for Sale

Britain today will offer 800,000 ounces of gold for sale at its third bullion auction this year, and a cautious market expected a positive outcome with higher prices, analysts said. Interest in the auction has been difficult to gauge with U.S. financial markets closed for the Thanksgiving holiday and reopening after the Bank of England auction. If the auction price reflects a premium to the spot price and a rash of bids, it could spur gold higher.

The July auction, which kicked off Britain’s controversial plan to reduce its gold holdings by 58% to 300 tons from 715 tons, forced prices down to levels not seen in two decades with gold hitting a low of $251.70 an ounce. The sale plan drew severe criticism from gold miners and producing countries that feared massive job losses and reductions in foreign exchange revenue as a result of the low gold price. But in September, prices soared in the wake of the auction, which was eight times oversubscribed, and the auction price settled 50 cents above the spot price. On Friday, gold closed at $299.40.