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Although it is partially beating the boycott, South Africa needs to sell even more gold to pay for its foreign purchases. Its officials have begun informal talks with the U.S. for some kind of compromise. Under one plan previously proposed by the U.S., South Africa would sell all of its gold in free markets but could sell some to central banks at $35 if the free-market price dropped to that level or below.
Johannesburg bankers imply that as part of any such compromise ending to the boycott, South Africa would drop its insistence that the official $35 price be raised and the dollar thereby devalued. Any agreement would probably be denounced by political liberals in the U.S. as unconscionable aid to one of the world's most racist nations. But a deal that would dissipate doubts about the integrity of the dollar would obviously help the U.S. too.