The U.S. dollar slumped in foreign exchange trading yesterday, reacting to a huge jump in the nation's money supply.The price of gold rose.

Gold closed in London at $280 an ounce, up $1.50 from Thursday. In Zurich, Europe's other large gold market, the metal rose $1 to *279,875. Gold rose $1 in New York to $280.

Closing prices for the dollar in New York, compared with Thursday: West German marks - 1.8880, off from 1.9045; French francs - 4.3785, off from 4.4050; Swiss francs - 1.6970, off from 1.7227; Japanese yen - 218.85, off from 220.23. The Canadian dollar sank to 85.28 U.S. cents from85.57. The British pound closed at $2.1110, up from $2.0976.

Closing rates overseas, compared to Thursday: Frankfurt - 1.8900 marks, off from 1.9094; Zurich - 1.7018 Swiss francs, off from 1.72745; Paris - 4.3870 French francs, off from 4.4090 Amsterdam - 2.0795 guilders, off from 2.0923; Milan - 849.325 lire, off from 852.4; Tokyo - 220.30 yen, down from 220.725 yen.

In London, the british pound rose to $2.10295, compared with $2.0955 the day before.