A New Type of Glitter

As it has done in times of political or economic crises since the days of the Pharaohs, the price of gold ran up last week. On one day of frenzied trading in London, it jumped a record $1.90 per oz. Later it vaulted to a post-World War II high of $54--a full $16 above the price at which central banks value the metal as a monetary reserve. But this flurry was only partly caused by fears that a wider war over Viet Nam might further undermine the shaky world financial system. More than that, the buying excitement, which had been building for several weeks, was caused by worry over a simple supply-demand imbalance.

Industry more and more appreciates that gold has properties beyond glitter. It is malleable and corrosion resistant, conducts electricity well and reflects light and heat. It is going into not only wedding rings and teeth but also into telephone equipment, jet-engine parts, auto-voltage regulators, electric razors and toasters--mostly in small amounts, alloyed with other metals, at points where electrical contacts are made. Meanwhile production in South Africa, the world's leading source of gold, has been declining, and the Soviet Union has been selling little of its growing gold cache in the West. Now that the price is up, Moscow may sell more--and reap the riches.

Buying last week was touched off partly by a report from London-based Consolidated Gold Fields Ltd., a company that owns interests in major South African gold mines, predicting that rising industrial demand and limited supply could push the price to $85 per oz. by 1980. That may be an overstatement, but some metal traders figure that the day is coming when gold will be too valuable an industrial commodity to be used as mere money.

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