The dollar rose sharply against the mark yesterday after a cut in the Lombard rate by the German central bank, and the gain fueled buying that also drove it higher against other currencies.

Gold inched down in Europe and New York, with an ounce going for $672.50 in both Zurich and London, down $2 from Wednesday's close in Zurich and down $3 from the previous London close.

In New York gold closed at $671.50, up a bit from Wednesday's $670.75. The Comex settlement price rose to $673.90 from $671.50. Silver climbed to $20.775 an ounce from $20.45, and it settled at $20.82, up from $20.77.

The dollar rose against all currencies, and New York dealers said the buying was fueled by the Deutsche Bundesbank's one-half-point cut to 9 percent in its Lombard rate.

A new York bank dealer said the German action and reports that the Organization of Petroleum Exporting Countries would cut production by 10 percent apparently overrode any negative impact from the $2 increase in the price of Saudi Arabian oil.

In London, the pound fell despite settlement of a threatened nationwide British dock strike. It was worth $2,3850 at the close compared with Wednesday's $2.3925. It remained at the $2.3850 level in New York.