CURRENCY : Durable Goods Report Buoys Dollar Prices

The dollar rose against most major currencies Tuesday, encouraged by a government report that durable goods orders reached a 30-month high in June.

Gold prices also rose. Republic National Bank of New York quoted a bid of $431.90 for an ounce of gold as of 4 p.m. EDT, up from a five-month low of $427.25 reached Monday.

Analysts said many dollar traders were on the sidelines, reluctant to make large commitments in advance of today’s scheduled release of the government’s gross national product figures for the second quarter.

The Commerce Department’s durable goods report provided one of the few sparks in Tuesday’s trading. Analysts said a plunge in commodity prices and weakness in the bond market had little impact on the dollar.

“The market was looking for something to hold onto and durable goods was the primary impetus that took the dollar up,” said Ron Sapiro, vice president for foreign exchange at Continental Illinois National Bank & Trust Co.

Continued Growth

The Commerce Department said durable goods orders rose 8.8% in June, their biggest increase since an 8.9% jump in December, 1985.

In overseas trading, dealers said the dollar was helped by suspicions that the U.S. Federal Reserve might be forced to tighten credit after the GNP report.

Dealers predicted that the GNP figures would indicate continued strong economic growth as well as inflationary pressures.

The British pound was quoted at $1.7135 late in the day in London, compared to late Monday’s $1.7265. In later New York trading, the pound slipped to $1.7075 from $1.7210 late Monday.

The dollar rose 0.35 Japanese yen in Tokyo to a closing 132.15 yen. Later, in London, it edged up further to 132.50 yen, and in New York, the dollar rose to 132.43 yen from 132.175 late Monday.

Gold Higher

Other late dollar rates in New York, compared to late Monday’s prices, included: 1.85925 West German marks, up from 1.84705 late Monday; 1.54625 Swiss francs, up from 1.5380; 6.2615 French francs, up from 6.2345; 1,373.25 Italian lire, up from 1,363.75, and 1.20925 Canadian dollars, down from 1.21475.

Other late dollar rates in Europe, compared to late Monday’s rates, included: 1.8600 West German marks, up from 1.8452; 1.5455 Swiss francs, up from 1.5345; 6.2670 French francs, up from 6.2215; 2.0975 Dutch guilders, up from 2.0745; 1,374.50 Italian lire, up from 1,359.50, and 1.2083 Canadian dollars, up from 1.2075.

Meanwhile, gold prices moved higher.

Jack Barbanel, a first vice president with Gruntal & Co. Inc. in New York, said gold “appears to be an insurance metal against the commodity and financial markets.”

“People aren’t playing on fears of inflation anymore,” he said. “They’re trading on fears of recession.”

Gold closed at $431.10 an ounce on the Commodity Exchange in New York, up from $425.90 late Monday.

Gold fell earlier in London to a late bid price of $433.50 an ounce, down from $434.75 bid late Monday, while in Zurich, the metal fell to $431.50 bid, down from $437.50 bid late Monday.

In Hong Kong, gold closed at a bid price of $432.34, down from $444.28 bid at Monday’s close.

Silver finished at $6.880 an ounce on the Commodity Exchange, down from $7.036 late Monday. The metal fell sharply in London to a late bid of $7.01 an ounce, down from $7.60 bid late Monday.

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