Dollar Falls in Europe; Gold Jumps Sharply

The U.S. dollar fell in Europe today against most key currencies amid signs of a slowdown in U.S. economic growth.

Gold prices, propelled by the weak dollar and fears of rising inflation rates, jumped as much as $8 an ounce. Silver surged above $9 an ounce.

Foreign exchange dealers said the dollar was pushed lower by worse-than-expected industrial production figures, which fell 0.4% in April, the sharpest drop in 13 months. The markets had been anticipating a 0.1% decline.

The dollar recovered slightly when U.S. banks announced later they were raising their prime interest rates.

In Tokyo, the dollar fell to a closing 139.37 Japanese yen from 140.05 yen at Thursday’s close, but was higher than 139.08 yen at last Friday’s close. Later today, in London, it slipped to 139.00 yen.

In London, the British pound was quoted at $1.6780, unchanged from Thursday’s late rate but higher than $1.6735 last Friday.

Other late dollar rates in Europe, compared to late Thursday, and last Friday’s late rates in parentheses: 1.7785 West German marks, down from 1.7850 (1.7915); 1.4570 Swiss francs, down from 1.4690 (1.4735); 5.9350 French francs, down from 5.9600 (5.9875); 2.0000 Dutch guilders, down from 2.0140 (2.0210); 1,286.50 Italian lire, down from 1,294.25 (1,295.00), and 1.3387 Canadian dollars, up from 1.3382 (1.3350).

In London, gold rose to a late bid price of $467 an ounce, up from $460 late Thursday. In Zurich, it surged to $469 from $461. Earlier, in Hong Kong, gold rose to $459.03 from $452.25.

Silver prices jumped in London to $9.10 from $8.765.