The price of gold reached $300 an ounce for the first time in history today in apparent response to overseas fears about turmoil in the Carter administration.
Market analysts attributed much of the gold price rise to a misunderstanding on the part of many Europeans and Asians that the resignations offered by the president's Cabinet and top White House aides were a sign the U.S. government was about to fall.
That was not the whole of the price picture, however.
The price of gold has been climbing in recent days because of the decline in the value of the dollar and a conviction on the part of many investors that President Carter's energy policies will do little to achieve the energy independence he seeks for the United States.
Nicholas Deak, president of the gold trading firm Deak, Perrara, said that there was "utter confusion" over the resigantions requested Tuesday by the White House.
Gold passed the $300-an-ounce barrier in London and New York. The $&(WORD ILLEGIBLE afternoon fixing in London put the metal at $302.15 an ounce. Handy Harman, a major New York metals dealer, quoted a New York close of $302.40.
Gold has been a traditional refuge for foreign investors, large and small, during times of inflation and a declining dollar. Since late 1974, U.S. citizens have been permitted to own gold and a strong market has grown up in the United States as well.
Analysts are divided over the future prospects for gold prices, although most think gold will continue to rise as inflation continues to accelerate and the U.S. continues to have problems coming to grips with its energy policies.
Vincent Tesi, a partner in James Sinclair & Co., said gold will "vault way over $300 in coming weeks." Sinclair & Co. is buying gold for its account and recommending to customers that they do so as well.
But one major gold trader said he is "waiting to sell it. The signs are that it will go down soon." He said the market has been held up by a few large buyers, such as Saudi Arabia, and a host of smaller buyers, especially in the United States.
He noted that 90 percent of the Treasury's gold auction tuesday was bought by Dresdner Bank, which usually buys for the Saudi Arabian Monetary Authority. "If they step out, kiss rising gold prices goodbye," he said.
James Bowe, spokesman for the New York Commodities Exchange, said that despite the rising cost of the metal, trading was not exceptionally heavy on the Comex. He said about 34,000 contracts (each for 100 ounces of gold) were traded today, only about half the record trading volume.
Jacques Luben, gold marketing specialist at Merrill Lynch, Pierce, Fenner & Smith, said that while many investors buy gold as an inflation hedge, most gold is bought for commodity uses such as making jewelry, coins or dental fillings.
Investors can invest in gold in three ways he said.
Most Americans prefer to buy gold futures, in much the same way they buy futures contracts on other commodities such as grain or cattle. In very few futures' contracts does delivery of gold ever take place.
Trading in gold futures contracts takes place both at the Comex here and the International Money Market in Chicago.
Investors can buy gold bullion (bars). They can also buy gold coins.
Luben said Merrill Lynch will buy gold for customers in three bar sizes: a one-kilo bar which contains 32.15 ounces of gold), a 100-ounce bar and a 400-ounce bar. The purchaser of a gold bar usually does not take physical delivery of he gold, but receives a certificate for a bar that is at an accepted depository. There are six in New York and three in Chicago.
Many investors buy coins, which trade at a slight premium over the intrinsic value of their gold content. Luben said investors often prefer the gold coins - such as the South African Kruggerand - because they can purchase 30 then sell five later if they want to, rather than having to sell their whole holdings as they would have to do with a bar.
Luben said that Canada will soon begin to mint a one-ounce gold coin that will be solid gold (.999) and could become as popular as the Kruggerand which is .9166 pure gold. CAPTION: Graph, Gold, The Washington Post