Dollar Little Changed; Gold, Silver Down

The U.S. dollar was unchanged or higher Tuesday against all major currencies except the Canadian dollar in moderate European trading.

Gold and silver prices dropped.

Despite some profit-taking Tuesday afternoon, the dollar held close to Monday’s levels.

Frankfurt dealers said further improvement in the dollar was hampered by new figures showing U.S. housing starts were down 2.9% to 1.7 million April.

The market did not react to remarks by Deutsche Bundesbank President Karl Otto Poehl that he expected the central bank’s policy of lowering West German money market interest rates to help stabilize exchange rates, dealers said.

However, signs that Japanese Prime Minister Yasuhiro Nakasone was having trouble controlling his cabinet and is running into increasing political difficulties helped keep the dollar relatively steady against the yen for most of the day, they said.

In Tokyo, the dollar rose to a closing 140.05 Japanese yen from Monday’s 139.42 yen. Later in London, the dollar was quoted at 139.90 yen.

In London, the British pound fell to $1.6820 Tuesday from $1.6843 late Monday.

Other late dollar rates in Europe, compared to late Monday’s rates, included: 1.7780 West German marks, unchanged; 1.4590 Swiss francs, up from 1.4565; 5.9475 French francs, up from 5.9375; 2.0035 Dutch guilders, unchanged; 1,289.50 Italian lire, up from 1.287.40; and 1.3407 Canadian dollars, down from 1.3415.

Gold closed weaker in thin trading, plagued by what dealers said was a general malaise affecting financial markets.

“People don’t know where to put their money at the moment,” one bullion dealer said. “The dollar is moving only a little and that’s not enough to inspire the metals markets.”

Gold fell in London to a late bid of $469.50 an ounce, compared to late Monday’s $474.00. In Zurich, gold declined to a bid of $468.50 an ounce from $473.50 late Monday.