Bank of England insists its (remaining) gold is pure, if a bit cracked

Section:

Bank of England Insists
Gold Is in Mint Condition

From Reuters
Sunday, September 30, 2007

http://uk.reuters.com/article/businessNews/idUKL3057966020070930

LONDON -- Some of Britain's gold reserves suffered surface cracks when they were cast 50 years ago in New York, but the purity of the Bank of England's bullion was not affected, the central bank said on Sunday.

The Bank was moved to issue a statement clarifying the purity of its gold after the Times newspaper on Saturday ran a report saying some of the gold might have a purity of just 91 per cent.

The Times' report followed the Bank responding to a freedom-of-information request by the trade journal Metal Bulletin.

Britain has 320 metric tons in gold reserves worth around 4 billion pounds.

"All gold held by the Bank is between 99.5 and 99.9 percent pure, the standard set by the London Bullion Market Association (LBMA), and has been assayed and stamped as such," said the Bank in its statement.

"The purity of the gold held by the Bank has not been questioned by the LBMA."

"Some gold cast into bars in New York about half a century or more ago developed surface cracks at that time, while the metal was cooling immediately after casting. This minor issue appears to be behind the inaccurate report."

The Bank is now in talks with the LBMA to decide whether the bars with the surface cracks do meet recently revised standards for gold traded in the market -- known as London good delivery bars.

If these bars do not meet this new standard, then the Bank will have to re-melt them.

"The cost of re-melting the bars would be an insignificant proportion of their value and the bars concerned represent a small proportion of the gold held by the Bank," the Bank statement added, without specifying how many bars were affected.

"The issue of lower casting standards at one gold refinery many decades ago is not confined to gold stored at the Bank of England."

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