Gold price slumps to 18-year low

GOLD prices slumped to an 18-year low as fears of a mass sale of bullion by central banks continued to cloud the market.

Gold bullion fixed at $283.25 (?169) an ounce in afternoon trading yesterday, its lowest price since August 1979. Gold prices have now fallen nearly $90 an ounce this year.

But analysts predicted that prices are set to plummet further with few signs that producers are prepared to make dramatic cuts in production to compensate for the central bank gold flooding on to the market.

The Argentine central bank precipitated the latest round of price falls after revealing last week that it had disposed of its entire gold reserves. The threat of a gradual sale of gold reserves by leading central banks, including Switzerland, has been the main cause of the price falls.

On the London Stock Exchange, the share price of Ashanti Goldfields which has now gone ex-div, closed 1/2 up at 436 pence.

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