LONDON, July 6: Gold's fortunes have plunged because of investors disdain and central bankers preference for paper money, sending prices tumbling to their lowest point in over a decade this week, reports AFP.

The catalyst for the meltdown was the Reserve Bank of Australia's shock announcement on Thursday that it had sold two-thirds of its bullion reserves.

The sale followed similar operations by the Belgian and Dutch central banks, and reinforced fears that have been weighing on prices since late 1996: that institutions will offload vast chunks of their gold stockpiles.

UBS analyst Andy Smith believes that these sales reflect a startling change in the mentality of the world's central bankers: they no longer insist on holding vast gold reserves to defend their national currencies, and instead are switching to foreign notes.

GOLD: Meltdown. Gold prices melted to their lowest point since December 1985 on Friday, after the Australian central bank said that it had sold off two-thirds of its strategic reserves.

Prices plummeted to 323 dol-

lars per ounce (of 31.103 grammes) at the start of trade on the London bullion market, which represented a fall of almost 13 dollars over the week.

SILVER: Tarnished. Silver prices fell by 20 cents to 4.55 dollars per ounce, in the wake of gold.

COPPER: Dullish. Copper prices continued to fall this week, losing 30 dollars to 2,400 dollars per tonne, on the London Metal Exchange (LME) under pressure from growing market stockpiles and technical selling.

Reserves in LME warehouses expanded nearly 6,000 tonnes over the week.

LEAD: Charged. The price of the metal, used mainly to make batteries, gained 25 dollars to 650 dollars per tonne. Lifted by zinc's glittering performance, which offset the negative effect of mushrooming lead stocks.

ZINC: Summit. Zinc prices soared to a high since September 1990, rising 65 dollars to 1,480 dollars per tonne after a wave of speculative and industrial buying.

One London analyst explained that speculators had piled into the metal, while manufacturers had rushed to

get in supplies for fear that prices might increase further.

GNI trading house warned that the zinc market could experience a meltdown once the speculative sales have fizzled out, underlining the fact that Chinese exports have doubled since prices began to surge.

ALUMINIUM: Hard. Aluminium prices rose by 20 dollars to 1 .600 dollars per tonne, amid continued fall in stocks of the metal held in LME warehouses.

Market reserves have fallen by about 3(10.000 tonnes since mid-January to 667,525 tonnes.

GNI trading house said supplies of the metal have become scarce in a number of markets, including Japan.

TIN: Tumble. Tin prices fell by about 30 dollars to 5,535 dollars per tonne.

OIL: Rise. Crude oil prices rose this week, after Iraq cut off oil supplies in a disagreement with the United Nations over its oil-for-food deal aimed at securing humanitarian aid for the Iraqi people.

Brent North Sea crude prices rose by 10 cents over the week to 18.1 dollars per barrel.

RUBBER: Soft. Devaluation of the Thai baht pummelled the

rubber market further this week. Thailand Is the world's leading producer and exporters of rubber.

The baht fell by 15 per cent after Thai authorities decided to float the currency in a bld to ease financial and economic crisis in the country.

COFFEE: Bubbling. The price of robusta coffee bubbled up. rising 40 dollars to 1.800 per tonne, on fears of crop-ravaging frosts in the plantations of Brazil.

TEA: Weak. Prices weakened on the London tea auctions, in contrast to the strong start to the year, with the price of medium-quality leaves falling five pence to 120.

According to trading house Wilson Smithett. Kenya has harvested only 80 million kgs of tea in the first five months of the year compared with 116 million in the same period of the previous year, because of terrible drought which has afflicted East Africa.

Sri Lanka is also expected to suffer a weak crop because the country's tea bushes are thirsting for rain.

The British trading house signalled rains could be less plentiful than expected In India. which would slash the

country's harvest.

SUGAR: Erratic. Speculative selling took the heat out of sugar prices early in the week, but prices recovered later, to close the week up one dollar at 316 dollars per tonne.

Dealers expected producers to unleash a wave of sugar sales. GNI said that the fall in the value of the Thai baht might lead to a doubling of exports from Thailand. Which is one of the world's leading sugar exporters.

VEGETABLE OILS: Slip. The prospect of a bumper soya harvest in the United States provoked a fall in prices on the Chicago Board of Trade. Soya prices fell by 78 cents to 7.22 dollars per bushel (of 27.2 kg-for delivery in July).

Ideal weather conditions for soya cultivation and an increase of 3.6 per cent in the area of land given over to production heightened market fears of increased American supply.

On the Rotterdam market, palm oil prices fell by 15 dollars to 512.5 dollars per tonne, sunflower oil prices fell by 50 dollars to 550 dollars per tonne.

Rapeseed oil prices rose by 1.5 guilders to 106 guilders per

GRAINS: Pressure. Weak

demand and the scale of the US harvest knocked prices back on the Chicago Board of TYade. the world's number one trading place for grains.

The price of wheat fell 13 cent to 3.20 dollars per bushel (27.2 kg delivery in July), while maize (corn) prices dropped six cents to 2.45 dollars per bushel (25.4 kg).

The world's wheat farmers are expected to harvest a healthy corn of 579 million tonnes over the 1997-98 season (July-June), the International Grains Council has forecast.

COTTON: Stable. Prices for the fibre held stable on the New York futures market, after the latest estimates for cotton bickerings in the United States the world's biggest producer, produced no surprises.

Traders now expect a US crop of below 18 million bales of cotton (217.7 kg), which is less than last year.

The cotton outlook index, which covers the cash market, remained steady at 81 cents per pound.

WOOL: Warmer. The first sales of the season on the Australian wool auctions got off to a good start, with the eastern index rising 10 cents to 7 16 Australian dollars per kg