Commodities : Tuesday, July 7, 1987 : Gold, Silver Prices Decline

Precious metals futures prices declined Tuesday, reflecting trader relief that Lt. Col. Oliver North did not directly implicate President Reagan in the diversion of arms sales profits to Central America.

The July silver delivery lost 26 cents an ounce before recovering somewhat on the Commodity Exchange in New York.

As North testified before congressional committees, the dollar strengthened and the stock market rallied, noted Bette Raptopoulos, a metals analyst with the investment firm Prudential-Bache Securities Inc. This triggered the retreat in precious metals, which are sensitive to the stability of the government.

“The metals market was concerned about the North testimony,’ Ms. Raptopoulos said. If North had implicated Reagan in the diversion of arms sales money to the Contras fighting the Sandinista government in Nicaragua, the presumed implication would have been a weakened administration and a flight of investment money to precious metals.

Gold settled $4.20 lower with the contract for delivery in July at $443.80 an ounce; and silver was 9.5 cents to 10.1 cents lower with July at $7.475 an ounce.