Rush for gold continues: Threat to dollar

London: Despite the closure of the big London and Johannesburg exchanges in an effort to check the gold stampede, a mad scramble for gold continued today in the world’s smaller markets.

In Paris, the police controlled crowds on the floor of the bullion market as agitated buyers exerted exceptionally heavy pressure, despite the fact that the price had soared 1,300 francs overnight to 7,000 francs for a one- kilo ingot.

Closure of the big bullion exchanges caused uncertainty, a wide fluctuation in prices and heavy pressure on the dollar in Europe and the Far East.

Bankers and dealers in several centres predicted that the United States would now be forced to raise the price of gold above its 34- year- old rates of $ 35 an ounce.

One Brussels dealer reported he had received enquires from potential buyers offering $ 45 an ounce.

The London bullion market, as well as the foreign currency exchange and the banks, closed today at the request of the US government to allow breathing space for counter- measures.

Johannesburg followed London’s lead and the South African Reserve Bank suspended foreign currency dealings.

The dollar slumped in Frankfurt and Zurich, and the German and Swiss Central Banks stepped in to support it. In Zurich, no gold was available after the recent buying spree.

In Hong Kong, gold prices fluctuated wildly. Confusion reigned, but tradition was less hectic than the last few days.

In Sydney, gold share prices slumped after spectacular rises, and in Tokyo stock and commodity markets rallied sharply.