Gold retreated in New York yesterday after Europe failed to take it over the previous day's $500 closing mark. The dollar's sharp advance against major foreign currencies contributed to gold's drop.

After opening at $501.50 an ounce in Zurich, gold closed at $497.50, still up on Tuesday's $483.50. In London it closed at $497, up from $486.

In New York, where panic buying in the last half hour Tuesday had pushed gold to $500.50 an ounce, it fell back to $488 at the close. The New York Commodity Exchange settled the January contract at $488.60, down from $502.50.

Silver plummeted to $12.68 an ounce from $13.075; it settled on the Comex at $12.075, down from $13.115.

In London, the pound closed at $1.5745, down from Tuesday's closing of $1.5765, and it fell to $1.5625 in New York. In Frankfurt, the dollar rose to 2.4170 marks from 2.3905 and to 2.4315 in New York.

In overnight Tokyo trading, the dollar rose to 234.50 yen from 230.60 and to 236.60 yen in New York. The Japanese yen is heavily traded on Chicago's IMM.