The price of gold has sunk to 20-year lows. Blame is falling on government agencies that have announced plans to sell some of their gold reserves. And you, Mr. or Ms. America, are pretty upset about the situation, according to a new "survey" of U.S. public opinion.

The survey, released last week by the World Gold Council, a trade group representing gold producers, found that "the American public opposes by a margin of two to one" the International Monetary Fund's proposal to sell a portion of its gold. That result may surprise people who weren't aware of the IMF's plan, and the survey's small print acknowledges that the figures don't include those answering "don't know" or "no opinion." But never mind; public opinion is "overwhelmingly" against such gold sales, a council spokesman said.

Hyperbole aside, gold is shaping up as a major bone of political contention this year -- and before long, ordinary Americans may indeed develop strong feelings about the gold market in ways they haven't since the late 1970s and early 1980s, when the yellow metal's price soared above $850 an ounce because of its perceived value as a hedge against inflation and economic chaos.

Having fallen by about one-fourth in the past couple of years, the price of gold dipped this week below $257 an ounce to its lowest level since May 1979. That may be good news for consumers, who are likely to see price reductions at jewelry stores in coming months, but it is dreadful for the worldwide gold mining industry, which has launched an impassioned campaign against plans by the IMF, Switzerland and the Bank of England to sell hundreds of tons of gold from their vaults.

Backing the industry is a small but vociferous band of gold bugs alleging that sinister forces are conspiring to knock the metal's price down. "It is only a matter of time before a `John Dean' comes walking in the door or someone sends us a `stained dress,' declared Bill Murphy, chairman of the Gold Anti-Trust Action Committee, in a speech posted on his group's Web site.

Most mainstream economists contend that, since major countries don't peg their currencies to gold anymore, it doesn't matter much to global monetary stability whether governments hold massive gold reserves or not. But the controversy threatens a much-ballyhooed initiative, unveiled by President Clinton and fellow world leaders at a summit last month, to help ease the crushing debt burdens of the world's poorest countries. Under the plan, the $2.5 billion proceeds from the IMF gold sale would be invested and used to repay the debts owed to the IMF of nations such as Mozambique, Nicaragua and Vietnam, provided they reformed their economies.

Some powerful U.S. lawmakers, several of whom are from gold-mining states, have already announced their intention to block approval of the IMF gold sale; they include House Majority Leader Richard K. Armey (R-Tex.) and Senate Minority Leader Thomas A. Daschle (D-S.D.).

This week, the anti-sale forces gained important support from South Africa, where gold companies have laid off about 100,000 miners in the past three years. The country's government was reacting angrily to Tuesday's auction by the Bank of England of 25 tons of gold, the first of five planned sales.

The British move was defended by Eddie George, the Bank of England's governor, as a "straightforward portfolio decision" to shift assets from gold into interest-bearing bonds. But the South African cabinet blasted the auction as harming the economies of the numerous poor countries where gold is produced, undermining the debt-relief initiative.

"This behavior and the decisions of other industrialized countries and the IMF on the public handling of gold sales is having the effect of defeating the very objective that they profess to pursue," the cabinet said in a statement.

Supporters of the IMF gold sale voice sympathy for gold miners but maintain that the plunge in gold prices stems from long-term factors -- the Asian financial crisis, for example, which severely dampened demand for the metal, and the steady decline of fears about inflation. The last time the IMF auctioned gold, they note, was from 1976 to 1980, when the price was surging.

"There will be support in the end [for the IMF gold sale], once members of Congress are educated about the benefits of the debt relief program, and how little gold we're talking about here," said Lydia Williams, an official with Oxfam America, an aid organization.

The IMF is planning to auction about 300 tons -- approximately 10 percent of its holdings -- over several years, and that is modest compared with the 4,000 tons that is supplied to global gold markets each year on average. The Swiss government is considering a much larger sale of about 1,300 tons, partly to provide compensation to Holocaust victims.

Independent analysts agree that the IMF sale matters much less in supply-demand terms than in psychological terms.

"The problem is it's one more piece of evidence that official holdings of gold are likely to be returned to the market," said Peter Ward, a precious metals analyst at Lehman Brothers Inc. in New York. "It isn't just the 300 tons the IMF is selling; the problem is that people worry about what happens if you sell the other 2,700 tons the IMF holds, plus the 8,000 tons the U.S. holds, plus the other 20,000 tons of central bank gold."

For that reason, some gold experts contend that official gold sales would be a lot more acceptable if they were done covertly.

"It's not so much the physical effect of gold entering the market," said Victor Webb, press counselor for the Gold Council. "The thing that troubles everybody is the psychology of it all. If institutions believe that gold can be sold, and perhaps by definition no longer has value as a currency or as a reserve asset, then that erroneous belief does more damage than introducing relatively small amounts of gold onto the market."

But secret sales would run counter to the world trend toward greater "transparency" by the IMF and central banks.

And Webb -- seemingly contradicting himself by making the argument for transparency -- contended: "If the market knew with a certainty what gold would be sold by institutions in a given year, it would be a much more stable market."

CAPTION: Not as Precious (This chart was not available)