Money: Shift in Gold

With his own franc weakening on world markets, General de Gaulle has suspended his offensive against Fort Knox—for a while. He had been consistently chipping away at U.S. gold reserves by buying bullion with the dollars that France earns from trade and tourism. In October, for the first time since early 1965, the French failed to make their regular monthly conversion of $34 million into gold. Reason for the shift: rising imports of goods and outflows of capital are cutting into France's once hefty balance of payments surplus. The country has few dollars to spare, and its bankers and businessmen want to hold onto them because they can earn higher interest rates on dollars than on French francs. Even so, a French Finance Ministry spokesman warned: "Next month we may be able to buy our $34 million worth of gold again."

On balance, the U.S. gold picture looks brighter. The Treasury reported last week that gold stocks in September rose by $37 million, the largest monthly increase since March 1963. For the year so far, total U.S. gold reserves are down $450 million—they now stand at $13.4 billion—but the loss is much less than last year's $1.67 billion. Thus, the attempts to bolster the nation's gold and payments position, by raising interest rates and reducing capital exports for loans and investments, are showing at least temporary success.