Newspaper article THE JOURNAL RECORD

Dollar Rises Widely; Gold Prices Slump

Newspaper article THE JOURNAL RECORD

Dollar Rises Widely; Gold Prices Slump

Article excerpt

NEW YORK (AP) - The dollar rose against other major currencies in worldwide foreign exchange Thursday amid speculation the Soviet Union was an active buyer of dollars.

Gold prices fell, surrendering much of the gains recorded over the two previous sessions. Republic National Bank in New York quoted gold as of 4 p.m. EDT at $334.75 a troy ounce, down $5.75 from Wednesday's late bid.

Currency dealers said that despite the dollar's advance, foreign exchange markets continued to lack a strong sense of direction. The dealers also said activity was limited pending several reports on the U.S. economy due today.

""Trading is very light. Everyone is sitting back and waiting for the U.S. numbers tomorrow,'' a dealer in Frankfurt said.

Some economists have predicted an acceleration of economic growth in the late stages of 1985. But recent data have given mixed signals, prompting uncertainty in the markets as to whether the upturnwill take place this year.

On Thursday the government reported a 1.6 percent rise in new-home sales for July and revised June sales to a 2.2 percent increase instead of the originally reported 0.1 percent decline. Dealers said that helped steady the dollar but did not appear to give it a significant boost.

The dollar had a mixed reaction to the Federal Reserve's late-afternoon report of a $2.8 billion mid-August rise in the basic U.S. money supply. The dollar slipped a bit against the French franc but edged higher against the Japanese yen.

Several dealers spoke of Soviet dollar purchases during European trading but disagreed as to the size of the purchases. Some traders said it appeared the purchases exceeded normal Soviet market activities, but others said the buying did not appear unusual.

In Johannesburg, meanwhile, banking sources said South African Finance Minister Barend du Plessis will announce details over the weekend of a policy package aimed at averting a deepening financial crisis and boosting the value of the rand. …

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