U.S. dollar firm, and gold easier

Press, 17 April 1980, Page 18

U.S. dollar firm, and gold easier

NZPA-Reuter London The United States dollar rose sharply on world foreign exchange markets on Tuesday, and the price of gold tumbled below SUSSOO an ounce.

The possibility that West European nations might join the United States in trade sanctions against Iran was cited by dealers as one reason for the dollar’s strength. A reduction in oil supplies as a result of the situation in Iran is s6en as likely to hurt Europe more than the United States, the dealers said. A basic reason for the dollar’s strength is still the record high interest rates of American banks, making the dollar attractive to investors.

Speculation that interest rates might soon be coming down brought a halt to the

dollar’s’ rise recently, and if went into decline, and its rise was seen partly as a market reaction against the decline. Dealers also reported that the markets now appear to think that the expected decrease in United States interest rates will be slow in developing. Gold traded at around $495 an ounce on the London bullion market, down froyt Monday’s level of about $5~4 an ounce. The high United States interest rates continued to draw attention away from gold, and trading on main bullion markets was reported to be slack. Gold is still above its lowest price this year. It fell to $460.50 an ounce on March 18, after President Carter’s anti-inflation package boosted the dollar.