Newspaper article THE JOURNAL RECORD

Retail Sales Boost Dollar; Gold Down

Newspaper article THE JOURNAL RECORD

Retail Sales Boost Dollar; Gold Down

Article excerpt

NEW YORK (AP) - The U.S. dollar was mixed, then turned upward Thursday, following reports of strong department store and auto sales in August. Gold fell.

At the New York Commodity Exchange, gold sold for $320.20 an ounce, down $4.70 from Wednesday's $324.90. Later, at Republic Bank in New York, gold sold for $320.50, down $4.25 from Wednesday's $324.75.

Gary Dorsch, senior analyst for G.H. Miller & Co. in Chicago, said the dollar reacted sharply when ""just about all the department stores showed nice gains.''

He said the report ""led to expectations that next week's retail sales report (by the government) may be rebounding for the month of August.'' That report is due a week from Friday.

Dorsch said the dollar gained more by midday, when the Big Three automakers reported sharp increases in their late August sales compared with a year ago. Ford reported a 79.6 percent hike, Chryslerwas up 76.1 percent and General Motors was up 73.6 percent.

""The significance is that car manufacturers are clearing their inventories, making way for increases in production in the months ahead,'' Dorsch said.

Earlier, European currency dealers said the dollar fell in response to Wednesday's reports that the $74 billion farm credit system needs an infusion of outside money to cover loan losses.

Because of this, the Federal Reserve might be less inclined to push up interest rates, and might be more inclined to push interest rates down, which would make the dollar less attractive to investors.

The U.S. currency recovered later in the day as market participants bought dollars to close out short positions, the dealers said.

Traders who sell short bet on a decline in the dollar by selling borrowed dollars, which they later must replace by buying dollars. …

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