NEW YORK — The dollar plunged on world foreign exchanges Tuesday, staging its biggest one-day slide in at least 14 years. In response, gold prices soared in hectic trading for the biggest daily gain in at least a decade.
"It seemed to be almost a one-way market," said Gary Dorsch, a foreign currency analyst at Oppenheimer Rouse Futures Inc. in Chicago.
Describing the surge in gold buying, trader Joseph Joyce at Donaldson Lufkin Jenrette Futures Inc. in White Plains, N.Y., referred to "the herd instinct. It just fed on itself."
Analysts attributed the change of fortunes for gold and the dollar to new inflationary expectations related to the closing of 70 Ohio savings and loan associations last week and to huge deficits in the federal budget and balance of trade.