The U.S. dollar soared close to a two-year high in Tokyo yesterday and posted substantial gains in Europe and New York on rumors of a peace initiative in the Middle East apart from the Iranian situation.

Gold settled back a bit from its big gains Wednesday despite a 1.8 million-ounce bid for 440,000 ounces of gold sold at the International Monetary Fund auction and an average price of $393.55 an ounce.

Gold closed in both London and Zurich at $390 an ounce, down from $395.50 at Wednesday's close in London and $395 in Zurich.In New York gold closed at $390.50 an ounce.

The dollar closed the day at 241.40 yen, up from 240.20 Wednesday and the highest since early 1978.

In Frankfurt the dollar rose to 1.7925 marks from 1.7865 at Wednesday's close; in Zurich to 1.6447 Swiss francs from 1.6360; in Paris to 4.2035 francs from 4.1940; in Brussels to 29.575 Belgian francs from 29.56; in Amsterdam to 1.99 guilders from 1.9850; and in Milan to 829.45 lire from 827.60.

In London the pound fell more than 2 cents to $2.0850 from $2.1060 Wednesday.

In New York the dollar closed at: 241.07 Japanese yen, 1.7920 German marks, 1.6460 Swiss francs, 28.97 Belgian francs, 1.9905 Dutch guilders, 829.30 Italian lire and 4.2030 French francs.