The dollar closed out the week with a show of strength yesterday after U.S. interest rates firmed. Gold was higher in Europe but fell in New York in response to the same higher interest rates.
In Zurich, gold closed at $495 an ounce, a $6.50 gain on Thursday's $488.50. In London gold closed at 4495.50, up from 4491.50 Thursday. Gold dropped to $485.50 an ounce in New York from $491.25 Thursday and settled at $485.30 on the Comex, down from $491.30. Silver slumped to $11.275 an ounce from $11.40 and settled at $11.23, compared with $11,38.
Gold reached a high of $496 in New York trading but turned down sharply when short-term interest rates rose after the Fed apparently drained reserves from the banking systems.
The dollar ended the week stronger because of a firming in Eurodollar rates. European dealers said trading was quiet as markets awaited release of the money supply figures, but an apparent draining action by the Fed led to specualtion that the money supply could jump.
European closing rates with late New York prices in parentheses:
Frankfurt, 2.18 marks, up from 2.1727 (2.1870); Zurich, 1.98775 Swiss francs against 1.97425 (1.9970); Paris, 5.16 French francs, up from 5.13875 (5.1750); Brusssels, 36.60 against 36.50 (35.60); Milan, 1086.30 lire compared with 1082.30 (1087).