Vancouver — With traders still digesting the horrific terrorist attacks in New York and Washington, the Bank of England went ahead and sold another 20 tonnes of gold at its scheduled auction.
The sale occurred a day after the attacks catapulted the metal’s price to a three-month high of US$290 per oz.
Overnight calm ensued in the metal markets. Gold traded in the range of US$280 per oz. at the time of the auction, which was 4.3 times oversubscribed.
Despite the uncertainty in financial markets, the interest was only modestly higher than the July auction.
The New York Mercantile Exchange, where gold futures are traded in the United States, was halted at 9:38 a.m. on Tuesday as a result of the attacks. It is not known when trading will resume.
In London, gold slid to US$279.50 per oz., down some 3% from Tuesday’s closing price.
There is now a US$4 spread between the bid price and asking price for 1 oz. gold. This is extremely high, compared with a spread of US50 in sessions before the attacks.
Uncertainty as to the state of financial markets and possibilities of retaliation measures by the United States are being cited as reasons for the high spread.
The Bank of England sale marks the third auction in a program of six that will run through March.
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