CURRENCY : Gold Stages Late Rebound; Dollar Mixed

Gold prices tumbled Monday in Europe but rebounded sharply in New York, based on a stunning rally in platinum that traders ascribed to fear of unrest in South Africa, a leading producer of precious metals.

The dollar vacillated in a narrow range in sluggish foreign exchange transactions, reflecting what brokers called the lack of economic news and a typical trading slowdown at month’s end.

European gold traders sold the metal aggressively, based on an underlying fear that gold was becoming a less attractive investment because of evidence of eased inflation.

In London, gold fell $6.50 an ounce from Friday levels to $425, and in Zurich, Switzerland, it fell $5.50 to $426.

Earlier in Hong Kong, gold declined about 15 cents to $430.19.

Later in New York, gold recovered the loss, and by 4 p.m. Republic National Bank of New York quoted gold at $430.50, up from $429.50 on Friday. On the New York Commodity Exchange, gold bullion for current delivery was quoted at $430.50, up 90 cents.

“The one word to explain it was platinum,” according to John Norris, a precious metals analyst at Citibank in New York. “We saw a sharp rally in platinum based on continued unrest in South Africa, and that helped firm gold prices.”

On the New York Mercantile Exchange, platinum for current delivery surged $25.30 an ounce to $475.

Silver prices also advanced on the New York Comex, up 8.4 cents from Friday to $6.24 an ounce.

Earlier in London, silver declined to $6.14 from $6.20 late Friday.

Currency brokers said dollar trading was uneventful and there were no financial developments to influence the currency’s behavior.

But some traders said government reports later in the week providing evidence of the U.S. economy’s direction might affect the dollar.

“Traders got fed up with the market today,” said Toshihiko Masaki, a foreign exchange trader at the New York office of Japan’s Sanwa Bank. “There was no economic data, no news, no factors. People got bored.”

The dollar fell in Tokyo to 128.12 Japanese yen from 128.35 yen at the close Friday. Later in London, the dollar edged higher to 128.35 yen. By the time trading concluded in New York, the dollar was quoted at 128.24 yen, down from 128.37 yen.

In London, the British pound eased to $1.7725 from $1.7730 late Friday. But later in New York, the pound was worth $1.7742, up from $1.7715.

Other late dollar rates in New York compared to late Friday included: 1.6874 West German marks, down from 1.6887; 1.3931 Swiss francs, up from 1.3863; 1.2592 Canadian dollars, down from 1.2634; 5.7155 French francs, down from 5.7170, and 1,243 Italian lire, down from 1,245.

Other late dollar rates in Europe compared to late Friday included: 1.6875 West German marks, down from 1.6895; 1.3903 Swiss francs, up from 1.3897; 5.7150 French francs, down from 5.7175; 1.8945 Dutch guilders, down from 1.8965; 1,244.25 Italian lire, down from 1,245.45, and 1.2622 Canadian dollars, down from 1.2838.

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