Climbing Franc

The price of gold tumbled in panicky selling on the Paris free market early last week. The U.S. $20 gold piece, which has been sliding from its January high of over 28,000 francs (about $88 at the official free rate), dropped to 21,200 francs (or $66), down 2,500 francs in a week. A 2.2 pound gold bar, worth 837,000 francs a few weeks ago, dropped to 635,000. The Bourse was baffled by the reason for the plunge. But it seemed to be caused by rising confidence in France's currency.

French farm prices were also dropping, which left farmers less money to buy gold, and which promised lower retail prices and increased buying power for the franc. Some financiers thought that the announcement of South Africa's gold shipments might also be a factor in the decline. The franc's value in terms of dollars had also risen sharply in the black market. A month ago, $1 had cost 505 francs. Last week, it cost only 395 francs.

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