FINANCIAL MARKETS : CURRENCY : Gold Sails Past $410 an Ounce, Dollar Drops
Gold prices rallied again on Wednesday, topping $410 an ounce. The dollar drifted mostly lower in sluggish pre-holiday trading.
Enthusiastic buyers continued to snap up gold bullion after the metal passed the psychologically significant price of $400 an ounce on Tuesday.
On the Commodity Exchange in New York, gold for current delivery surged $7.30 an ounce to $411. The Republic National Bank quoted gold bullion at $410 as of 4 p.m. EST, $6.50 higher than Tuesday’s late bid.
In earlier overseas trading, gold was bid late in London at $409.75, up from $402.75 late Tuesday. The late bid price in Zurich, Switzerland, soared to $409 from $399 late Tuesday. Hong Kong gold prices rose $8.28 to close at $406.89.
Silver turned in a mixed performance, posting sharp gains abroad before steadying in the United States.
The metal rose to a late bid of $5.83 an ounce in London, up from $5.71 late Tuesday. Silver gave up a portion of Tuesday’s 14.6-cent gain in New York. On New York’s Comex, silver for current delivery settled at $5.800, compared to $5.834 on Tuesday.
The dollar ended lower against most major currencies in choppy European and U.S. trading as traders remained preoccupied with the West German mark.
Trading activity was described as subdued. West German markets were closed for the day; U.S. and Japanese markets were winding down for Thanksgiving holidays on Thursday.
Currency dealers are bullish toward the mark because they are betting West Germany might have to raise interest rates to keep its economy from overheating. It is widely believed that West German growth will accelerate as East Germans continue to pour into the country.
Higher West German interest rates would raise returns on mark-denominated investments and spur demand for marks.
The dollar was quoted at 1.81275 marks late in New York, down from 1.81375 on Tuesday. Earlier, in London, the dollar changed hands at 1.8095 marks, down from 1.8200 marks late Tuesday in London.
In Tokyo, the dollar fell 0.55 Japanese yen to a closing 143.88 yen. Later in London, it fell to 143.50 yen and in New York, it declined to 143.10 yen, down from 143.555 late Tuesday.
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