Gold futures prices sagged to the lowest level in nearly five months Monday as investment funds continued to pummel the precious metal markets amid a lack of inflationary signals.
* A core of industrial stocks pushed the Dow Jones average higher, but the broader market retreated.
Both gold and silver dropped through price levels that had been viewed as psychological barriers: $350 for gold and $4 for silver. Those events triggered additional selling, analysts said.
On the New York Commodity Exchange, gold for current delivery plunged to $342.70 an ounce, off $7.50 from Friday. Silver fell 16 cents to $3.905 an ounce.
Precious metals have been in a tailspin since early August, partly reflecting falling prices of such basic commodities as crude oil, soybeans and corn.
The government reported Friday that wholesale prices dropped in August. On Monday, precious metal traders braced for the possibility of similar news in today’s report on consumer prices.
“We’re looking for a modest increase, but I’m not going to be shocked at any surprises,” said Ted Ryan, director of futures research for Chicago Corp., a trading company.
Platinum lost $3.10 to end at $352.60 an ounce on the New York Mercantile Exchange, compared to a high last month of $421 an ounce.
Meanwhile, light, sweet crude oil for October delivery settled 19 cents higher on the New York Mercantile Exchange at $16.95 a barrel.
Uncertainty over President Clinton’s health plan dampened the health care sector. Overall, smaller stocks slipped in quiet dealings as the market failed to post a strong follow-up to a rally Friday.
The Dow industrial average rose 12.30 points to 3,633.93, after gaining more than 32 points the previous session.
Business was subdued, with interest focused on specific areas.
Analysts said the market looked tired overall and that investors were sidelined prior to today’s report on consumer prices.
Among the market highlights:
* Paramount Communications rose 3 3/8 to 64 1/2. It will merge with Viacom, whose Class B shares lost 2 5/8 to 56 3/4, in a stock and cash deal valued at $8.2 billion.
* Gold stocks were among the weaker groups, noted David Shulman, U.S. equity strategist at Salomon Bros. Echo Bay Mines fell 5/8 to 9 1/8 and Pegasus Gold shed 1 to 18 3/4.
* Health care stocks were lower at the start of trading and stayed that way. Among the larger decliners: U.S. Healthcare, down 1 1/2 to 42 1/2, and United Healthcare, down 1 7/8 to 55. Baxter International fell 7/8 to 21.
* Elsewhere in the media group, CBS Inc. gained 2 to 263, King World Productions rose 1 3/4 to 40 1/2 and Walt Disney gained 3/4 to 40 3/4.
Advancing issues narrowly outnumbered declining ones on the New York Stock Exchange. Big Board volume totaled 243.44 million shares in late trading, down from 266.46 million on Friday.
In overseas trading, stocks ended higher in Tokyo on heavy index-linked buying, sending the Nikkei average to a new closing high for this year of 21,148.11, up 330.13 points. In Frankfurt, the DAX 30-share average finished up 11.13 points at 1,872.57. London’s Financial Times 100-share average closed 12.2 points lower at 3,024.8.
Meanwhile, in the bond market, long-term interest rates rose slightly as investors sold bonds to capitalize on the recent rise in prices and bided time ahead of the monthly inflation statistics due out today.
The Treasury’s main 30-year bond yield rose to 5.88% from Friday’s 5.87%. Its price, which moves in the opposite direction, slipped 1/32 point, or 31 cents per $1,000 in face value.
The federal funds rate, the interest on overnight loans between banks, was 3.0%, up from 2.9% late Friday.
The dollar rose against most major currencies in light trading as investors took profits and awaited the data on consumer prices and retail sales for August.
The dollar gained on the yen as market participants anticipated an interest rate cut and other measures to stimulate Japan’s economy and shrink the Japanese trade surplus. The greenback finished in New York at 106.27 yen, up from 106.05.
The dollar closed at 1.609 German marks, up from 1.598.
Market Roundup, D10