The price of gold was pushed to historic highs yesterday by massive purchases from the Middle East. Bullion trader James E. Sinclair says this indicates that "something is brewing in the Middle East that will affect the price [of gold] and could affect the availability of oil.

"Such a development is positive for gold but negative for the world standard of living," Sinclair added. The gold purchases could mean that the oil-producing countries plan selective rationing, production cutbacks or a switch from the dollar to the european Monetary System.

After hitting $257.25 during traiding yesterday, gold dropped back a bit to close at $256.625 an ounce in Zurich compared with $255.375 Tuesday and at $256.275 in London compared with $254.875. The New York close was $257.25.

The U.S. dollar remained steady after chalking up gains tuesday.

In Tokyo, if jumped to 214.90 yen from Tuesday's close of 212.65 yen.

In Frankfurt, it edged up to 1.9063 marks from 1.9058, in Zurich to 1.7267 Swiss francs from 1.7258, in Brussels to 31.51 Belgain francs from 31.4650 and in Amsterdam to 2.0760 guilders from 2.0690.

In London, the pound weakened a bit to 2.0610 from $2.0630.

In Milan, the dollar was unchanged at 850.95 lire, and in Paris it eased to 4.4035 francs from 4.4065.