25 Years Ago

PUBLISHED : Sunday, 24 January, 1999, 12:00am
UPDATED : Sunday, 24 January, 1999, 12:00am

HONGKONG (January 26): GAMBLERS in gold hugged themselves in glee yesterday as the free-market price shot up in Europe to a near-record U.S.$141.50 an ounce - and smugglers, who can start their dangerous and illicit trade legally from Hongkong, permitted themselves a grim smile.

The latest gold rush was sparked after a conference in Brussels given by the EEC Commission Vice-President Mr Wilhelm Haferkamp, who appealed for Common Market financial leaders to agree to a higher price for gold held in their official reserves than the present phoney U.S.$42.22 an ounce.

The idea is that governments in the enlarged EEC could square up their tangled debts more easily if they could use bullion at something nearer to its realistic value.

This was the first time that an EEC chief has stated openly that gold should find its own price level - and of course the oil shambles is largely responsible.

The Hongkong bullion markets remain closed until Monday. When they trade again, the local price will obviously rocket in line with other centres.

The Colony's already formidable reputation as a splendid kick-off point to smuggle gold into Korea, Indonesia, the Middle East and on to India, got another boost a few weeks ago when the Government scrapped all import and export restrictions on the movement of the metal here.

This step removed the irritating necessity for smugglers to ship the stuff to Korea and back again before they could embark on there lucrative trade.

Government officials are apparently unaware of such entrepreneurial activity, and the new regulations were presented as a purely administrative measure.

The Hongkong stance now is no more immoral than that of the Swiss who blandly announce that there is no law against the export of gold from their country and cheerfully make up bars in handy form (pictured) for hippies and businessmen with early international travel plans.

The United States authorities are still firmly against any tampering with the official gold price and want the rich nations to continue their efforts to reach a monetary reform acceptable to everyone. Gold buyers are betting that they do not stand a chance.