Commodities : Thursday, Jan. 9, 1986 : Precious Metals Prices Gain

Precious-metals futures prices advanced strongly Thursday, responding to the decline in the stock and bond markets and the political tensions caused by a standoff between Libya and the United States.

In an extremely active market, gold futures climbed as much as $8 an ounce and silver 33 cents an ounce before falling back on the Commodity Exchange in New York.

Part of the advance was technical, said Jack Barbanel, an analyst in New York with Gruntal & Co.

“Platinum had been building a premium over gold, so there had to be a move in gold and silver to keep the balance,” he said.

“But the timing was very, very good, because of the Libyan situation, with the United States freezing Libya bank accounts in this country,” he said. “There’s some feeling that if the Arab League supports Libya, the Arabs will be out of dollar assets and into tangible assets, like gold and silver.”

Libya’s foreign minister, Ali Abdussalam Treiki, said Libya wants the Moslem world to boycott American goods and withdraw its money from the United States, in response to President Reagan’s anti-terrorist sanctions against the Libyan government.