CURRENCY : Dollar Steady in Light Trading; Gold Prices Advance

The dollar was little changed in light foreign exchange trading Wednesday, while gold prices edged higher.

Republic National Bank of New York quoted gold bullion at a bid price of $476.20 an ounce at 4 p.m. EST, up from $474.50 late Tuesday.

The currency market’s sideways movement was still being blamed on traders’ lingering doubts about the effectiveness of recent economic initiatives by the United States and its trading partners.

In response to a U.S. promise to cut its budget deficit, several European central banks announced interest rate reductions this week, but the markets were largely unimpressed.

Economic reports on U.S. durable goods orders and personal income were nearly in line with traders’ expectations and had little impact on trading.

In overseas trading earlier in the day, the dollar dropped against all major currencies. One dealer in Frankfurt, West Germany, said that the markets appeared to be waiting for the next move by the major industrial powers, which have been under pressure to prop up the global economy since last month’s stock market collapse.

In Tokyo, where the trading day begins, the dollar closed at 134.52 Japanese yen, down from 134.93 Tuesday. Later in London, the dollar traded at 134.65 yen, down from 135.35. In New York, the dollar brought 134.895 yen, compared to 134.625.

In London, one British pound cost $1.7940, more expensive for buyers than Tuesday’s late $1.7775. In New York, the pound was quoted at $1.7915, little changed from $1.7920.

Other selected late dollar rates in New York, compared to late Tuesday’s rates, included: 1.6705 West German marks, up from 1.6685; 1.3718 Swiss francs, up from 1.36975; 5.6665 French francs, down from 5.6695; 1,227.50 Italian lire, down from 1,2229.00, and 1.3098 Canadian dollars, up from 1.31425.

Other late European rates, compared to Tuesday’s late rates: 1.6700 West German marks, down from 1.6830; 1.3698 Swiss francs, down from 1.3825; 5.6567 French francs, down from 5.7055; 1.8760 Dutch guilders, down from 1.8950; 1,229.50 Italian lire, down from 1,237.37, and 1.3095 Canadian dollars, down from 1.3145.

Metals dealers said some investors were turning to gold after last month’s crash on world stock markets.

“We are seeing some investors coming in who believe it’s better to ride a 2% rise in the gold price than suffer a 50% loss on the stock market,” said one dealer in Zurich, Switzerland.

Gold closed in London at a bid price of $477.00 an ounce, up from $474.00 late Tuesday, and in Zurich at $476.00 bid, up from $474.00.

Earlier in Hong Kong, gold closed at $479.50 bid, up from $476.60.

On the New York Commodity Exchange, gold bullion for current delivery was quoted at $476.60 an ounce, up from $474.90 late Tuesday.