Dollar Generally Higher in Quiet Trading; Gold Mixed

The dollar turned mostly higher in listless trading Monday as it continued a recovery from the steep sell-off of last week.

Gold prices drifted in a narrow range in quiet trading. Republic National Bank in New York said gold bullion was bid at $316 an ounce as of 4 p.m. EST, unchanged from the late bid Friday.

The dollar now has climbed about 1% in the past two sessions after tumbling about 5% over the previous five trading days.

Deborah Allen Olivier, president of Claremont Economics Institute, a consulting service in Claremont, Calif., said the dollar’s sharp drop was not unlike declines in each of the previous four years that followed periods of steep gains.

“The dollar has just about completed its annual inventory reduction sale,” she said. Olivier predicted a period of stabilization “and then a renewed surge of dollar strength.”

Market Is Pausing

David Palmer, a senior vice president at First American Bank of New York, said that, for the time being, “the market is pausing, catching its breath.”

One unknown facing traders is the course of U.S. interest rates in advance of the Treasury Department’s auction later this week of $16.25 billion in government notes and bonds.

“The market’s waiting to see which way the cat’s going to jump,” Palmer said.

Higher interest rates at the auctions would make returns more attractive on dollar-denominated investments.

In Tokyo, the dollar rose to 256.35 Japanese yen from 254.90 on Friday. Later, in London, the dollar was quoted at 256.30 yen and, by the end of the trading day in the United States, the dollar had climbed to 256.835 yen from 255.475 late Friday.

The British pound fell to $1.1712 in London from $1.1740 late Friday. But later in New York, sterling nudged up to $1.17325 from $1.1730 late Friday.

Other late dollar rates in Europe, compared to late rates Friday, included: 3.2350 West German marks, up from 3.2200; 2.7450 Swiss francs, up from 2.7265; 9.8900 French francs, up from 9.8300; 3.6565 Dutch guilders, up from 3.6305; 2,056.00 Italian lire, up from 2,048.50, and 1.3810 Canadian dollars, up from 1.3750.

New York Rates

Dollar rates in New York, compared to late rates Friday, included: 3.2340 West German marks, up from 3.2230; 2.74075 Swiss francs, up from 2.7180; 9.89625 French francs, up from 9.8400, and 1.3785 Canadian dollars, up from 1.3745.

Gold slipped $1.77 in Hong Kong to close at a bid of $315.20 an ounce.

In Europe, gold fell $1.40 in London to a late bid of $315.60 an ounce, and gold rose 50 cents in Zurich to $315.50.

On the New York Commodity Exchange, gold bullion for current delivery slipped 30 cents to close at $316.10 an ounce.

Silver rose 1 cent to a late bid of $6.295 an ounce in London. Later on New York’s Comex, silver bullion for current delivery closed at $6.296, off 2.9 cents from Friday’s close.