Dollar Edges Lower; Gold Off in U.S.

The dollar edged lower against most major currencies Wednesday following the release of figures on the growth of the U.S. economy.

Gold prices rose in Europe but fell later in the United States. Republic National Bank of New York said gold was bid at $387.75 an ounce, down $5.25 an ounce from Tuesday’s bid of $393 an ounce.

Dealers said the currency market was disappointed that the upward revision in third-quarter growth in the gross national product was mostly the result of a higher estimate of defense spending. News that U.S. housing starts fell 0.2%in October also fueled the bear market.

“The forex (foreign exchange) market is back into that ‘prove it’ attitude as far as the U.S. economy and dollar strength is concerned,” said Chad Dickson, a vice president of Salomon Bros.

Trading was fairly thin as the dollar seemed to remain within its narrow trading range against the Japanese yen and West German mark, said Lawrence Kreicher, economist for Irving Trust.