Newspaper article THE JOURNAL RECORD

Dollar Moves Higher in U.S.; Gold Prices Stage Retreat

Newspaper article THE JOURNAL RECORD

Dollar Moves Higher in U.S.; Gold Prices Stage Retreat

Article excerpt

NEW YORK (AP) - The dollar rose against most other major currencies in U.S. trading Thursday after a mixed performance on European markets.

Gold prices fell worldwide, meanwhile, and Republic National Bank in New York quoted gold as of 4 p.m. EST at $387.75 a troy ounce, down $4 from Wednesday's late bid.

Traders said the dollar's upswing, which lifted it above 2 West German marks, reflected mostly technical trends such as dealer purchases to cover short positions.

In a short sale, dealers sell dollars they previously borrowed in the hope the currency's value declines, after which they repurchase the dollars for a lower price, return them to the lender and pocket the difference. Those repurchases help boost the dollar.

Ronald Holzer, chief dealer at Harris Trust & Savings Bank in Chicago, said the dollar's rebound also was part of what he termed ``the Iranian correction.''

The dollar and other financial instruments came under heavy selling pressure recently from investor concern about the political storm caused by the secret U.S. sale of arms to Iran. But earlier this week the concern began to dissipate, and stocks and bonds recovered.

The dollar, in following suit Thursday, represented ``the last leg of the Iranian correction,'' or rebound from the earlier selloff, Holzer said. He added that the dollar had climbed back to about where it was before the Iranian controversy erupted.

Still, continuing signs of economic weakness in the United States are keeping pressure on the dollar, traders said.

The Commerce Department said Thursday, for instance, that orders to U.S. factories plunged 3.6 percent in October for their biggest decline in more than six years. …

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