Speculation Drove Taiwan Gold Import From S Korea

Bullion dealers said on Wednesday that much of Taiwans large 1996 gold imports from South Korea were speculative transhipments by major Korean firms, and that the practice has now been curbed.

Bank of Korea figures showed that Taiwan imported 41.6 tonnes gold from South Korea in 1996, but Taipei bullion dealers said the gold did not originate in S Korea.

Gold imported from South Korea in 1996 was gold made by other major bullion producers, one dealer said,

Imports from South Korea comprised fully 43 percent of Taiwans total of 95.655 tonnes of gold imports last year.

Many major Korean firms made speculative gold transhipments before the South Korea government began cracking down on the practice in July 1996. South Korean bullion houses imported gold on 90-to 120-day deferred payments, and then exported the gold at a slight discount and put the money in high-interest money market instruments that more than made up for the discounts.