Dime Store Gold Rush

By week's end.

As one General Services Administration official put it: "This wasn't any 5 and 10-c--store trade. These were Tiffany items." On the block in what must have been one of the most widely watched auctions ever held was a small chunk of the U.S.'s 276 million-oz. gold stockpile, offered for sale to the public in minimum lots of 400 oz.--worth $70,000 at pre-sale prices. But when the 209 bids submitted last week were opened, it looked like the great gold sale had drawn a strictly Woolworth's crowd.

European Buyers. The Government threw out 56 bids, among them a number of frivolous ones offering $1 per oz., and ended up selling only 756,000 oz. of the total of 2 million oz. that the Treasury had put on the market. The 153 bids accepted offered an average price of $165.67 per oz.; that was substantially below the London free market price that morning of $173 per oz., and well under the late-December high of $197.50. Europeans were big buyers; more than half of the gold that was sold went to the New York subsidiary of West Germany's Dresdner Bank. None of the large U.S. bullion refiners and dealers even bothered to submit bids.

Even so, the sale was at least a partial success for the Treasury. The gold, worth only $32 million at the $42.22 per oz. "official" price (used between governments), went for $124,841,256 in the auction--a tidy 300% profit. More important, as Washington had intended, the sale helped to dampen further the hopes of speculators that great numbers of Americans would rush to trade dollars for the yellow metal after it became legal for them to own bullion on Dec. 31. Bullion bulls in Europe and the Middle East were only temporarily distressed by the American disinterest, however. In a show of confidence that legal gold would yet glitter for them, they bid the price back up to $178 on the London market by week's end.

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