CREDIT : Early Advance in Bond Prices Erased After Gold’s Upswing

NEW YORK — Bond prices finished slightly lower Thursday in sporadic trading, failing to sustain their early gains of the session.

The Treasury’s closely watched 30-year issue slipped point, or $2.50 for every $1,000 in face value. Its yield rose to 9.03% from 9.01% late Wednesday.

Analysts said bond prices advanced early in the trading day in response to Wednesday’s positive news on inflation but lost ground later as gold prices rebounded.

Gold prices continued to slump early in the session, trading below $400.

But the bond market’s early gains were soon eroded when gold recovered, analysts said. The metal finished in New York at around $399 an ounce, up from $396.35 late Wednesday.

In the secondary market for Treasury bonds, prices of short-term government issues slipped 1/32 point to 3/32 point; intermediate maturities declined 3/32 point to 3/16 point, and 20-year issues were down point, according to Telerate Inc., a financial information service.

The movement of a point is equivalent to a change of $10 in the price of a $1,000 bond with a $1,000 face value.

The Shearson Lehman daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 1.48 to 1,143.46.

Meanwhile, corporate bonds inched higher. Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, was up 0.09 at 290.13.

The federal funds rate, the interest on overnight loans between banks, was quoted late at 8.313%, down from 8.875%.