High U.S. interest rates and political uncertainty in Europe pushed the dollar to a 10-year high against the French franc and to major gains against other currencies yesterday.
The British pound plunged to a three-year low that dealers said could portend further sterling weakness.
In Zurich gold closed at $422.50 an ounce, down from Tuesday's close of $426.50. In London gold closed at $425.50, down from $427 the previous day.
In New York gold fell $8 to $4l6.50 an ounce from Tuesday's $424.50. The New York Commodity Exchange settled the July contract at $414, down from $423.50. Silver plunged to $8.37 an ounce from $8.57 and it settled on the Comex at $8.33, down from $8.555.
In London, the pound sank to its lowest level since July 1978, closing at $1.903 compared with Tuesday's $1.9305. In late afternoon in New York it had plunged to $1.8945.
In Paris, the dollar rose to 5.74375 francs, up from Tuesday's 5.70, and it rose to 5.7474 in New York, the highest level since December 1971. Said another way, one franc now costs about 17 1/2 cents compared to about 25 cents last year.