U.S. dollar improves and gold also firms

Press, 16 August 1980, Page 18

U.S. dollar improves and gold also firms

PA London The United States dollar improved against major European currencies yesterday, for the first time this week, but gold prices con-. tinned to climb after a sharp drop at -the start of the week. Dealers in Frankfurt called the improvement of the dollar illogical. Much of the dollar buying came during the afternoon when ■ United States banks entered j the market, they said. ! “It doesn’t make sense,” i jone dealer said, explaining ; that all available news : pointed, if anything, to a )weaker dollar. ; | “Dollar interest rates are ■ weakening and there is anti- ■ cipation in the market that i i several United States banks I I may cut their prime rates I -next week.” the dealer arjgued. j I Arab threats of a Holy !

War and talk of an oil embargo over the Jerusalem issue should also be. depressing the dollar, he said. The only explanation dea - . ers had to offer for the dollar’s relative strength was ; that after the adoption of much of Senator Edward Kennedy’s reflationary economic programme at the Democratic convention in New York, there was a wave of : euphoria about United States I economic prospects. The price of gold rose $l2 Ito close at $626.50 a troy ; ounce in Zurich and rose to $625.00 an ounce in London, . from Wednesday’s $614.00. Dealers in Zurich said the : increase was accompanied bv quiet and solid trading. - Arab traders participated 4 throughout the day, they added. Silver bullion closed in I London at $15.95 an ounce, 'from Wednesday’s $15.80.