$US hammered by dealers

Press, 19 July 1979, Page 19

$US hammered by dealers

Commercial

NZPA London» Gold prices hit new alltime heights on Tuesday while the dollar was hammered on currency exchanges as dealers found no; short-term benefits in Presi-i dent Carters’ energy measures. Gold appeared set to breach the 5U.5.300 an ounce barrier within days: and some London dealers predicted the break could come this week. The metal rose in London to $298,375 a troy ounce, nearly $6 up on Monday’s closing-price, which was a record. In Zurich, gold was selling at $296,125, another record for Europe’s main bullion market. In Frankfurt and London, the United States dollar slumped to its lowest level against the West German mark, and the pound sterling since last October. Nothing, including Britain’s estimated half-year trade deficit of 1900 M could stop the pound rising against the dollar. “Nothing looks right for the dollar in the short-

term,” commented a London, dealer. Dealers based their refusal to snare Western leaders’ positive view of Carter’s speech on some reservations about his ability to implement the measures fully. Carter announced wideranging conservation measures, and said that by 1990 the United States would halve its dependence on foreign oil. Gold dealers said that, despite the sharp price rises, trading in the metal was not hectic on Tuesday and small amounts were involved. “It is the long-term that [Carter is aiming at, but in the meantime the United

, States inflation rate seems to be rising, and so does the United States money-supply. They should be raising interest rates, but have not done so,” the dealer said. The pound, in particular, was moved up by Arab oilmoney, in what some experts foresaw as an ominous tendency of oil-exporting countries to diversify their vast dollar holdings into other currencies. The dollar lost more than 2 cents against the pound on Tuesday to close at $2.2705. In Frankfurt, the United States currency slipped to 1.0152 marks from Monday’s 1.8200 marks — its lowest level since the Carter

;! Administration announced / measures to protect the dol- . 1 last autumn. -| German dealers said that ? only large-scale intervention ion Tuesday, by the New , I York Federal Reserve, which ■lbought an estimated S3OOM -'for marks, and a third of > I that by the German Bunt desbank, stopped the dollar r falling further against the > mark. In Tokyo, where trading i ends before it begins in Euri ope, the market had flue-' '. tuated on Monday against i conflicting assessments of ) | Carter’s speech, but on s Tuesday the dollar closed at tj 216.00 yen, compared with r(217.70 yen on Monday.