Dollar Stabilizes; Gold Advances

The dollar stabilized late Tuesday, leveling off after a steep selloff that began Monday in the United States and spread earlier Tuesday to Japanese and European foreign exchange markets.

“Today was a day of licking wounds,” said David Arbesman, a vice president at Prudential-Bache Securities in New York.

The dollar fell late Monday, with traders selling the currency to cash in on previous gains, after the dollar failed to break above exchange rates viewed as significant resistence levels by investors who base trading decisions on technical charts. The dollar also was hurt Tuesday after the Commerce Department reported orders received by U.S. factories for durable goods rose 0.4% in May.

The price of gold rose. Republic National Bank of New York said gold bullion was bid at $342.75, up $1.75 from Monday’s bid.

The performance was weaker than some analysts had expected and there would have been a decline in orders had it not been for a big rise in the volatile defense category.