CURRENCY : Dollar Falls in Quiet Trading; Gold Prices Jump, Then Recede

The dollar fell against all major currencies except the Canadian dollar in quiet trading Monday, mirroring a selloff in both the stock and bond markets.

Gold prices jumped as much as $5 an ounce in active trading, spurred by a rally in oil prices. Republic National Bank of New York quoted a bid price for gold of $449.45 an ounce as of 4 p.m. EST, up from $444 an ounce late Friday.

Gold prices moved in concert with crude oil futures prices, which pierced the $17-a-barrel level before sliding back late in the trading session on the New York Mercantile Exchange.

Currency dealers said the dollar moved in a narrow trading range throughout the day. Trading was quieter than usual because a national holiday in Japan kept financial institutions closed.

In London, the dollar was quoted at 126.85 yen late Monday compared with 128.35 yen in Tokyo late Friday. Later in New York, the dollar closed at 126.92 yen, down from 128.00 yen on Friday.

One British pound cost $1.8285 late Monday in London, slightly more expensive than late Friday’s $1.8235. In New York, it cost $1.8297 to buy one pound, more expensive than $1.8240 late Friday.

Other late dollar rates in New York, compared to late Friday, included: 1.6894 West German marks, down from 1.69575; 1.3986 Swiss francs, down from 1.4040; 5.7545 French francs, down from 5.7590; 1,249.00 Italian lire, down from 1.255.50, and 1.24905 Canadian dollars, up from $1.24885.

On New York’s Commodity Exchange Inc., gold closed at $450.20 an ounce, up from $445.20 on Friday, in reaction to higher oil prices and the specter of inflation. But as sentiment in the oil market became bearish later in the session, gold prices began to recede.

In London, gold jumped $6.25 an ounce to a late bid price of $449.50. In Zurich, Switzerland, the metal was up $5.50 an ounce to a late bid of $450.50.

Earlier, in Hong Kong, gold closed at $448.26 bid, up 36 cents from Saturday’s late bid.

Silver bullion prices rose in London to a late bid price of $6.47 an ounce from Friday’s $6.31. On New York’s Comex, silver closed at $6.447 an ounce, up from $6.365 on Friday.