Gold at $US387

Press, 13 January 1982, Page 19

Gold at $US387

PA London Gold bullion prices slumped to their lowest levels in more than two years as dealers reported a wave of selling in expectation of even lower prices. The U.S. dollar strengthened against all major currencies, boosted by higher interest rates in the United States Gold closed at 5U5387.50 a troy ounce in Zurich, the major European trading centre, down from $399.50 on Friday, and keeping below the psychologically important $4OO mark. The price was the lowest since November | 15. 1979, when it stood at $386. That was a high price in those days as gold prices were setting records. Two months later, on January 21, 1980, gold hit an all-time record of $B5O an ounce in Zurich. Since then the price has declined steadily. Monday’s closing gold price in London was $389 an ounce, down from $400.75 on Friday and its lowest since ■ November 20, 1979, when it closed at $3BB. A Swiss bullion dealer said the market is bearish — in a selling mood — with strong speculation that gold will drop to $350. The dealer said there was no special reason for the selling wave. It was not, he said, prompted by the big producers, the Soviet Union and South Africa, which had stopped selling. He added ' that the market is not being helped by deepening recession in the United States. Silver bullion closed in London SUSB.OO an ounce, down from $8.33 on Friday. Silver was twice that price one year ago. Currency dealers said the exchange rate of the dollar was buoyed by a higher deposit rate for Eurodollars — the dollars owned by Europeans to serve the dollar market in Europe — as well as by a firmer rate for United States Federal ! funds. But some dealers said there was uncertainty over the direction of United States interest rates and the dollar might fall again.