SUS weakened by inflation

Press, 11 August 1979, Page 19

SUS weakened by inflation

NZPA-Reuter London Gold continued to rise sharply in price on world markets on Thursday, with the dollar weakened on the release of figures showing United States inflation rising faster. In London, the world’s leading market for gold, the

metal closed at $U5297.25 an ounce, a rise of $6.00 for the day. In Zurich, another leadiing gold market where the metal closed today at $296,875, dealers were divided on prospects for gold price movements. Some said the price was rising too fast

again, but other predicated it would soon go beyond the record $307 an ounce reached two weeks ago. Dealers said that the main reason for gold’s continued rise after an increase invalue of more than $B.OO an ounce on Wednesday, was the 1.1 per cent rise in United States wholesale prices in July, compared with a 0.5 per cent rise in June, and a predicted 0.6 - 0.7 rise for July. Money markets did not react as sharply as the gold markets although the dollar’s weakness improved the fortunes of the pound sterling, which was under pressure for more than a week. The pound rose by two cents against the dollar to close at $2.2355 on European foreign exchange markets. The United States inflation

figures initially pushed the dollars down substantially against other major currencies, but it rallied to close at 1.8228 West German marks (1.8295 at Wednesday’s close), 1.6507 Swiss francs (1.77), 4.2415 French francs (4.2507) and 215.80 Japanese yen (216.50).

Dealers thought that the late dollar recovery might have come from intervention by the United States Federal Reserve Bank after the dollar reached a low 1.8212 marks in Frankfurt in the afternoon.