Dollar Drifts Lower; Gold Rises

The dollar drifted downward in a day of light trading on world currency markets Friday. Gold prices continued rising.

“It was a very quiet day,” said John Lungmus, a currency trader at Bank of America’s in New York. “I think a lot of the activity had been done for the week in putting the dollar where it is.”

Recently, traders have grown bearish on the U.S. currency, generally because they do not expect nation’s economy to grow much in the second half. Against this backdrop, what trading there was Friday was downward, but there “just wasn’t enough participation” for major changes, Lungmus said. Currency trading was also thin in Europe, dealers said.

A gold trader in Zurich said bullion was supported by the dollar’s losses and the volatile situation in South Africa, a major gold producer. He said the market was disappointed that South African President P. W. Botha had not been more conciliatory toward the black majority in his speech Thursday.