The dollar strengthened on world currency markets Friday after President Bush gave Saddam Hussein an ultimatum to begin withdrawing his forces from Kuwait by noon Saturday.
Gold was moderately lower, due to technical factors and the dimming of its safe-harbor appeal amid peace prospects. On New York's Commodity Exchange, gold bullion for current delivery fell $5.70 a troy ounce to settle at $357.00. Republic National Bank quoted a late bid for gold of $356.75, down $4.50 a troy ounce.The U.S. currency rose quickly in European and U.S. trading after Bush in a speech told Saddam to "begin his immediate and unconditional withdrawal from Kuwait" or face a decisive ground assault.
The terms released by the White House were that Iraq's half-million troops must complete their withdrawal within one week, Baghdad must free all prisoners of war in the first 48 hours, and coalition forces will not attack withdrawing troops.
"The prospects for a long, drawn-out war and the negative impact it would have on the U.S. economy is diminished," said Tom Benfer, senior market representative in foreign exchange at Bank of Montreal in New York.
Technical factors also boosted the dollar Friday. Bush's comments helped push the dollar to 1.5000 German marks in U.S. dealings around midday, a barrier it had struggled to surpass for the past month.
"Once we broke through it moved up quite quickly," said Benfer.
The dollar settled at 1.5055 German marks late Friday, up from late Thursday's 1.4925 marks. In European dealings, the dollar bought 1.5045 marks, up from 1.4905.
In London, the British pound fell to $1.9440 from $1.9580 late Thursday, while in New York it fetched $1.9445, less expensive than late Thursday's $1.9568.