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Gold Gives Up Most of Monday’s Gains

December 11, 1990

Undated (AP) _ Gold futures prices retreated Tuesday on New York’s Commodity Exchange, erasing most of the gains made in the previous day’s trading.

On other markets, energy futures fell; grains and soybean futures were mostly lower; livestock and pork futures were mixed; and coffee futures soared.

Gold’s losses came on reports the German Bundesbank would sell 1 billion marks of gold to help finance reunification. Following the Bundesbank’s denial of the report, the market rallied, but fell as energy prices retreated.

John Steel, an analyst with Refco Inc. in New York, said the call before the start of trading Tuesday was for gold to move higher in follow-through buying from Monday’s strong showing. But the rumor of German selling put a damper on that.

″The market jumped on the idea that the Germans were going to sell gold,″ Steel said. ″The story was flimsy. Anyone who knows about gold knows that governments seldom, if ever, sell their gold reserves.″

Also helping to push gold lower was the strength shown by the dollar against foreign currencies.

Gold settled $2.10 to $2.30 lower with the contract for delivery in February at $373.60 a troy ounce; silver was 1.5 cents to 1.7 cents lower with December at $4.067 a troy ounce.

Energy futures were lower in quiet trading on the New York Mercantile Exchange as traders consolidated their holdings in anticipation of the release of American Petroleum Institute inventory figures.

Also sending the market lower was an announcement by Venezuela that it plans to boost crude oil output by 44 percent over the next six years.

Concern also existed in the market over what will come out of Wednesday’s scheduled Organization of Petroleum Exporting Countries meeting in Vienna, said Ron Caples, an analyst with Shearson Lehman Brothers Inc. in New York.

Light sweet crude was 49 cents to 64 cents lower with January at $26.41 a barrel; heating oil was 1.08 cents to 3.29 cents lower with January at 77.68 a gallon; unleaded gasoline was 94 cent to 1.25 cent lower with January at 66.79 cents a gallon; natural gas was .015 cent to .070 cent lower with July at $2.285 per thousand cubic feet.

Grain and soybean futures closed mostly lower in lackluster trading on the Chicago Board of Trade.

There was little news to spur trading, as most were consolidating their holdings in anticipation of the release Tuesday of the U.S. Agriculture Department’s supply and demand report.

Traders also were awaiting Soviet Foreign Minister Eduard Schevardnadze’s visit to Washington Wednesday, said Dan Cekander, an analyst with Rodman & Renshaw Inc. in Chicago. There is a belief the USDA will use the occasion to announce the award of U.S. aid or the granting of export credits to the Soviets.

Wheat futures, while lower, received some support from news that China has been targeted with 1.5 million metric tons of export bonus wheat.

Wheat was 1 1/2 cents lower to 1 1/4 cents higher with the contract for delivery in December at $2.54 1/2 a bushel; corn was a 1/2 cent to 1 cents higher with December at $2.27 1/4 a bushel; oats were a cent lower to a 1/2 cent higher with December at $1.10 3/4 a bushel; soybeans were 1 1/4 cent lower to 1 1/2 cents higher with January at $5.94 a bushel.

Coffee futures soared on New York’s Coffee, Sugar & Cocoa Exchange.

Strong European demand for Central American coffees, coupled with those countries’ reluctance to sell, helped boost prices.

Also helping to lift prices is labor uncertainty in Colombia. Workers at Barranquilla, Cartagena, Santa Marta and Buenaventura are threatening to strike to protest government plans to privatize ports.

Coffee was 1.80 cents to 2.60 cents higher with December at 91 cents a pound.

Livestock futures were mixed in trading on the Chicago Mercantile Exchange.

Live cattle were .10 cent to .18 cent higher with December at 80.72 cents a pound; feeder cattle were .35 cent lower to .25 cent higher with January at 88.72 cents a pound; live hogs were .18 cent lower to .05 cent higher with December at 49.85 cents a pound; frozen pork bellies were .05 cent lower to .18 cent higher with February at 66.65 cents a pound.