Gold Falls Below $300 in Europe; Dollar Is Mixed

The dollar turned in a mixed performance in nervous trading today amid speculation that a key U.S. interest rate was about to fall.

Gold prices edged lower, slipping below $300 an ounce in Europe.

European currency dealers said the dollar was held down by speculation that the Federal Reserve Board would lower its discount rate while foreign central banks would raise their key lending rates.

The discount rate is the interest on Fed loans to banking institutions. It has stood at a six-year low of 8% for the past month.

If rates fall in the United States and increase elsewhere, returns would be less attractive on dollar-denominated investments.

As the trading day began in Tokyo, the dollar fell to 253.75 Japanese yen from 254.08 yen Thursday and 253.95 yen at the end of the previous week. In later London trading, the dollar was quoted at 253.87 yen.

The British pound, meantime, continued to be battered by expectations of further declines in oil prices. Britain depends heavily on revenue from its huge North Sea oil holdings.