The Soviet Union, hungry for hard currency, is stepping up the pace of its gold sales, metals analysts and dealers agree.
"Precise statistics on sales are hard to come by, but there's no doubt that Moscow has sold more gold than usual," a bullion dealer said."Dealers have been aware of heavier USSR sales since the early this year and deliveries have been particularly heavy in Zurich," one metals analyst said.
The Soviet Union, the world's second-biggest gold producer after South Africa, sells the metal to pay for imports. But the nation has also been borrowing more from the West recently and may need to unload gold to service its debt.
Traders said they believe that if the Soviets keep up their pace of sales they stand a good chance of exceeding the estimated 5 million to 6 million ounces they sold in 1988.
Dennis Selby, president of U.S. Futures Inc., said Soviet monthly gold sales of more than 600,000 ounces would put the tonnage over the 1988 level. "Anything like 500,000 ounces a month would be on course with last year's (level)," he said.
Analysts said the Soviets will continue to sell gold until their foreign exchange reserve goals are met. But the real pressure on gold in the future may come from dumping by speculators who become demoralized by the metal's performance.
But the Soviet selling may stop short if prices fall too much, others said. "It's not in the interest of the USSR to chase the market with heavy quantities of gold and they can't afford to pound the market down," one analyst said.