Dollar Mainly Lower, Gold Prices Surge
Gold made heavy gains, spurred by surging platinum prices and renewed sensitivity to political strains in South Africa, dealers said. At Republic National Bank in New York, gold stood at $437.50 at4 p.m. EDT. That was up $12.50 from Wednesday's late price.
The dollar's declines derived from ""the same old bearishness,'' said Earl Johnson, an analyst at the Chicago-based Harris Trust & Savings Bank.
""There's a lot of scepticism over the underlying strength of the U.S. economy, and whether the trade accounts will improve, despite the better numbers in August,'' he said.
On Tuesday, the Commerce Department reported a $4.7 billion drop in the August trade figure, to $13.3 billion - the biggest monthly drop on record.
Johnson and European foreign exchange dealers said the West German central bank had intervened by buying an unspecified amount of dollars on the open market after the dollar began to slide.
But, Johnson said, ""the amount of support was very small, and it didn't seem to have any effect at all.''
""We haven't seen the level at which the Bundesbank is going to intervene heavily to support the dollar,'' a European dealer said.
In London, dealers said the Bank of England apparently intervened to prop up the British pound against the dollar and the West German mark. Sterling fell to $1.4360 from $1.4445 late Wednesday. Later, one pound sold for $1.4360 in New York, cheaper than the $1.4458 of late Wednesday.
In Tokyo, where the trading day begins, the dollar rose to a closing 154.33 Japanese yen from 154.27 yen at Wednesday's close. Later, in London, it was quoted at 154.25 yen, and in New York it soldfor 153.83 yen, down from 153.95 Wednesday.
Other late dollar rates in New York, compared with late Wednesday, were: 2.0060 West German marks, down from 2.0188; 1.6263 Swiss francs, down from 1.6378; 1.3877 Canadian dollars, down from 1.3879; 6.5700 French francs, down from 6.6140; and 1.3890 Italian lire, down from 1,396. …