COMMODITIES : Precious Metals Gains Modest Despite Dollar’s Slump

Precious metals futures posted moderate advances Thursday, but analysts said the gains were more subdued than they would have otherwise expected in view of new declines in the slumping dollar.

On other markets, coffee futures declined, wheat was higher and energy futures were mostly lower.

“Gold just doesn’t want to rally,” said Craig Sloane, an analyst in New York with Smith Barney, Harris Upham & Co. “The same thing with silver; they just seem to give up ground very, very easily.”

Precious metals don’t always faithfully track currency prices, he said, “but with the kind of move we’ve gotten in the currencies, you’d think gold would do something.”

At the Chicago Mercantile Exchange, all foreign currency futures except the Canadian dollar reached new highs.

“Currencies are at a crossroads,” he said, with West Germany unenthusiastic about doing much more to stabilize the dollar.

“Japan can’t do it by itself so more pressure is going to be on the U.S.,” said Sloane.

“But if the market senses these guys are not going to be really unified about intervention, the market’s going to be much more vigorous about taking the dollar down,” he said.

Thursday may have been the beginning of a major test of the dollar and next week could be critical, he said.

The British pound for delivery in March was 305 points higher at $1.87; the March West German mark was 105 points higher at 63.89 cents, and the March yen was 159 points higher at 0.8316 cent.

At the Commodity Exchange in New York, gold settled $3.40 to $4.10 higher, with February at $488.90 an ounce; and silver was 6.5 cents to 7 cents higher, with March at $6.77 an ounce.

Coffee futures declined, continuing Wednesday’s big losses attributed to disappointment that cuts in international export quotas failed to materialize.

The quotas set up under the International Coffee Agreement are tied to an average of certain cash prices. Exports could have been cut by 1.5 million 132-pound bags if the price had fallen below $1.15 a pound.

However, the price stood at $1.1521 after Wednesday’s session, and although Thursday’s price won’t be available until Monday, analyst Debra Tropp of Prudential-Bache Securities said it didn’t appear to have fallen enough.

This means that two cuts of 1 million bags each will be made during the first quarter of 1988, but the additional 1.5 million reduction probably will be lost. The total worldwide quota is 56.5 million bags a year.

On the Coffee, Sugar & Cocoa Exchange in New York, coffee settled 0.88 cent to 1.42 cents lower with the March contract at 125.96 cents a pound.

Wheat futures were mostly higher, corn retreated and soybeans were mixed in subdued dealings the Chicago Board of Trade.

The advance in wheat futures came amid rumors that the government may have sold only half the grain that was expected to be moved at its weekly auction, said Victor Lespinasse, a trader with Dean Witter Reynolds.

As it turned out 12 million bushels were sold at auction, compared to 25 million the week before.

Corn futures were under pressure from increased farmer selling of the grain overnight.

Wheat settled unchanged to 1.50 cents higher, with the March contract at $3.1075 a bushel; corn was unchanged to 0.50 cent lower, with March at $1.8475 a bushel; oats were 0.25 cent lower to 2 cents higher, with March at $1.855 a bushel, and soybeans were 2.75 cents lower to 4.50 cents higher, with January at $6.07 a bushel.

Energy futures were mostly a little lower at the New York Mercantile Exchange.

West Texas Intermediate crude oil settled 14 cents to 19 cents lower, with February at $16.70 a barrel; heating oil was 0.17 cent lower to 0.26 cent higher, with January at 51.44 cents a gallon, and unleaded gasoline was 0.03 cent lower to 0.16 cent higher, with January at 43.67 cents a gallon.

Livestock and meat futures were mostly lower in featureless trading on the Chicago Mercantile Exchange.

Live cattle were 0.05 cent to 0.30 cent lower, with the February contract at 63.12 cents a pound; feeder cattle were 0.20 cent lower to 0.12 cent higher, with January at 76.87 cents a pound; live hogs were 0.15 cent lower to 0.17 cent higher, with February at 41.07 cents a pound, and frozen pork bellies were 0.35 cent lower to 0.23 cent higher, with February at 51.32 cents a pound.

Stock index futures declined on the Chicago Mercantile Exchange, with the March delivery of the Standard & Poor’s 500-stock index down 3.45 points at 246.75. The spot index closed at 247.09.