NEW YORK — The dollar fell in thin pre-holiday trading Thursday, nudged downward by pessimism over how much real support the major industrial nations have for the U.S. currency.
Gold prices rose. Republic National Bank of New York quoted a bid of $486.50 for an ounce of gold as of 2:30 p.m. (EST), up more than $3 from $483.35 late Wednesday.
Activity was very light in the domestic precious metals and foreign currency markets as traders left early for the Christmas holiday. Overseas, trading virtually ended at midday, and West German markets were closed the entire day.
The dollar fell amid speculation that the Group of Seven--the major industrial nations who late Tuesday reiterated their support for the dollar--truly meant what they said, said Jack Barbanel, a vice president with the investment firm Gruntal & Co.
The Group of Seven issued a statement Tuesday saying the dollar had fallen far enough and that they would take unspecified steps to prevent its further decline.
"The foreign currency markets will be testing the G-7 to see whether they'll put their money where their mouth is," Barbanel said.
In London, one dealer said the dollar was moved lower mostly by corporate sell orders.
In Tokyo, where trading ends before Europe's business day begins, the dollar rose 0.10 yen to a closing 126.65. Later, in London, it was quoted at a lower rate of 125.98. In New York, the dollar slipped to 125.90 yen from late Wednesday's 126.65.
Reopening on Tuesday
In London, the dollar fell against the British pound. It cost $1.8320 to buy one pound, more expensive than $1.8205 late Wednesday. In later New York trading, the pound rose to $1.8315 from $1.8255 late Wednesday.
Other late dollar prices in New York, compared to late Wednesday's rates, included: 1.6250 West German marks, down from 1.6335; 1.3190 Swiss francs, down from 1.3285; 5.5050 French francs, down from 5.5275; 1,195.00 Italian lire, down from 1,202, and 1.3060 Canadian dollars, down from 1.30695.