Dollar Soars; Gold Drops

Associated Press

The dollar extended its historic rally on European foreign exchange markets Monday in a broad and powerful advance as central banks apparently refused to intervene against the currency's surge.

It was the 15th record-setting day for the dollar out of 17 business days this month.

As the dollar surged, gold prices tumbled to levels last seen in 1979, dropping about $15 an ounce in Europe's major bullion centers after edging higher as the day began in Hong Kong.

In its climb to new heights, the dollar set records against the currencies of Britain, Canada, France, Italy and Spain, rocketed to 13-year highs against the West German mark and the Dutch guilder and rose to a 10-year high against the Swiss franc.

In Tokyo, the dollar began the trading day by rising to 263.05 Japanese yen from 262.35 yen Friday.

In London, the British pound dropped to a new low of $1.056 from $1.073 Friday.

Other late dollar rates in Europe, compared to rates Friday, included: 3.4515 West German marks, up from 3.3900; 2.9095 Swiss francs, up from 2.8560; 10.5450 French francs, up from 10.3550; 3.9120 Dutch guilders, up from 3.8390;2,153.50 Italian lire, up from 2,111, and 1.3975 Canadian dollars, up from 1.3870.

Gold bullion plunged $15.25 to a late bid of $284 an ounce in London. In Zurich, gold fell $15 to $283.50 an ounce.

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