GOLD: No More, No Less

Eight months ago, the gold-producing Union of South Africa asked the International Monetary Fund to change its rules on gold sales. The Union wanted permission to sell half its annual output, which is the largest in the world, for whatever it could get. Since gold is bringing $40 an ounce in some free world markets, South Africa, in effect, wanted the Fund to abandon the official gold price of $35 an ounce.

Last week, the Fund said no. There is "no economic justification," it ruled, for sanctioning an increase in the price of gold. Furthermore, such an action might weaken...