Dollar Gains in Europe; Price of Gold Drops

The U.S. dollar rose against all major currencies except the Canadian dollar and the Italian lire in thin trading in Europe today. Gold prices were little changed.

Speculation that the United States may post a smaller-than-expected merchandise trade deficit in May helped trigger afternoon buying that pushed the dollar higher, dealers said. The official figure for May is to be released Wednesday.

One trader said the deficit would have to exceed $14 billion to turn sentiment against the dollar. Economists forecast a May deficit of about $13.6 billion.

Late dollar rates in Europe included: 1.8496 West German marks, up from 1.8425; 1.5405 Swiss francs, up from 1.5365; 6.1540 French francs, up from 6.1335; 2.0765 Dutch guilders, up from 2.0760; 1,334.50 Italian lire, down from 1,335.50, and 1.3177 Canadian dollars, down from 1.3200.

The British pound was lower against the dollar, trading at $1.6112, down from $1.6180.

In Tokyo, where business ends before Europe’s day begins, the dollar closed at 150.60 Japanese yen, down from 151.28 yen. Later in London, the dollar was trading at 151.05 yen.

Gold prices were little changed in light trading. In London, gold bullion rose 50 cents in late trading, to a bid of $447.50 an ounce.

In Zurich, the precious metal closed down 50 cents at $447. Gold closed earlier in Hong Kong at $447.05, up from $443.94.

Silver was quoted in London at a late bid price of $7.63 an ounce, down from $7.74.