Dollar Declines; Gold Up

Expectations of lower U.S. interest rates pushed the dollar lower today, ending a four-day rally by the U.S. currency. Gold prices rose.

Currency dealers said there was continuing speculation that the U.S. Federal Reserve would lower the discount rate it charges to member borrowers.

The British pound rose almost 3 cents to $1.2140, compared to $1.1850 Monday.

In Tokyo, the dollar closed at 254.15 yen, up from 252.50 yen Thursday. Japanese markets were closed on Friday and Monday. Later, in London, the dollar was quoted at 253.45 yen.

Other late dollar rates, compared to late Monday’s rates: 3.1820 West German marks, down from 3.2370; 2.6780 Swiss francs, down from 2.7185; 9.6925 French francs, down from 9.8475; 3.5825 Dutch guilders, down from 3.6750; 2,020.00 Italian lire, down from 2,059.50, and 1.3807 Canadian dollars, down from 1.3855.

Gold was quoted in London at a late bid price of $314.50 an ounce, up from $312.50 on Friday. London’s gold and silver markets were closed Monday.

In Zurich, the metal rose to $313.50, compared to $309.50 late Monday.

Earlier, in Hong Kong, gold rose 43 cents to close at $311.85 bid.

Silver was quoted in London at a late bid of $6.265 an ounce, up from $6.205 Friday.