Memorandum submitted by HM Treasury (PAC
00-01/44)
I felt it would be useful, following last Tuesday's
gold auction, to provide the Public Accounts Committee with updated
auction information, prior to the hearing on Monday 5 February.
I attach a copy of the Bank of England's press
notice giving the result of the auction on 23 January. I have
also set out in Appendix A updates of the information contained
in figures 12, 13 and 14, and in paragraphs 2.13 to 2.16 of the
Comptroller and Auditor General's Report.
SALES PROGRAMME
FOR 2001-02
As the Committee is aware the Treasury announced
the UK's gold sales programme for the financial year 2000-01 on
3 March 2000. It is possible that we will follow this pattern
again this year and announce the sales programme for the financial
year 2001-02 in March prior to the next auction on Wednesday 14
March. This will facilitate the smooth operation and running of
the March auction. However, before announcing our plans we will
be reviewing the auction process and that will include consideration
of the suggestions/recommendations in the Comptroller and Auditor
General's Report.
Gus O'Donnell
HM Treasury
26 January 2001
Appendix A
UPDATED AUCTION
INFORMATION:
Figure 12
At the tenth auction on 23 January 2001, 805,600
ounces of gold were sold at $268.00 per ounce that generated revenue
of $215.9 million or £147 million at the exchange rate at
close on Tuesday 23 January*.
Including the tenth auction, total revenue from
the gold sales rose to $2,206 million or £1,500 million at
the exchange rate at close on Tuesday 23 January*.
Figure 13
Price at 23 January 2001 auction:
| $268.00 per ounce |
Proceeds from 23 January 2001 auction: |
$216 million |
Bid cover ratio at 23 January 2001 auction:
| 4.8 |
| |
Figure 14
Afternoon London Gold Fix on 23 January 2001
| $266.10 per ounce |
Variation between the afternoon London Gold Fix and the price at tenth auction 23 January 2001
| $1.90 per ounce |
| |
Comparison of average auction price with average London Gold
Fix price (paragraphs 2.13 to 2.16 of Report and figure 16)
(a) Average auction price at ten auctions:
| $274.31 |
(b) Difference between average auction price and the average London Gold Fix (pm) on day of each auction:
| 38 cents |
(c) Average London Gold Fix (pm) price over the period from the first auction (6 July 1999) to date of last auction (23 January 2001):
| $278.06 |
(d) Difference between (c) and (a) above:
| -$3.75 (1.3 per cent) |
(e) Average London Gold Fix (pm) price over the 20 month period from 10 May 1999 to 9 January 2001:
| $277.25 |
(d) Difference between (e) and (a) above:
| -$2.94 (1.1 per cent) |
| |
*$1.4709 = £1
Bank of England News Release
HM GOVERNMENT GOLD
AUCTION RESULT:
23 JANUARY 2001
The Bank of England announces that the gold on offer (approximately
25 tonnes or 803,600 ounces) has been allotted in full at a price
of $268.00 per ounce. Details of the result are as follows:
Amount of gold on offer (approx) | 803,600 oz
|
Amount applied for | 3,852,400 oz
|
Times covered | 4.8 times |
Amount allotted to bidders | 805,600 oz
|
Allotment price | $268.00 |
Scaling factor at allotment price | 35.8035 per cent
|
| |
All accepted bids which were made at prices above the allotment
price have been allotted in full at the allotment price. Valid
bids made at the allotment price have been allotted an amount
of gold equal to the amount bid for multiplied by the above scaling
factor and rounded up to the nearest 400 ounces.
By close of business in London today, applicants whose bids
have been successful in whole or in part will be notified by the
Bank of England of the exact weight of the gold bars allotted
to them and the amount payable in respect of their purchase. Payment
must be made in US dollars to the Bank of England's account at
the Federal Reserve Bank of New York, no later than 12 noon New
York time on 25 January 2001.
NOTES FOR
EDITORS
On 3 March 2000, HM Treasury announced that the Bank of England,
on behalf of HM Treasury, is to sell approximately 150 tonnes
of gold from the Exchange Equalisation Account in a programme
of six auctions of around 25 tonnes each in the financial year
2000-01 on the terms and conditions set out in an Information
Memorandum which was published on 3 March 2000. This is the fifth
auction in the programme of six. Auctions were held on Tuesday
23 May, Wednesday 12 July, Tuesday 19 September and Tuesday 7
November 2000. The remaining auction in this programme will be
held on Wednesday 14 March 2001.
Bank of England
23 January 2001
|