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Gold - selling off reserves

On May 7 1999 the government announced that it was planning to sell around 60% of the UK's gold reserves. There were three key elements to the announcement:

1. 125 tonnes of gold would be sold in the 1999/2000 financial year.
2. The gold would be sold at single price auctions, of which there would be 5 between June 1999 and March 2000. The first auction took place on 6th July 1999.
3. Although further disposals were planned for future years, around 300 tonnes of gold would be retained in the reserves.

The decision was based on an assessment of the balance between risk and return for the UK's reserves. At the time of the announcement, gold represented just over two-fifths of the net reserves and the intention of the sales was to reduce that to around one-fifth of the value of net reserves.

The announcement in advance and the decision to proceed by using single price auctions was designed to provide maximum transparency so that everyone knew the intentions in advance of the auctions.