Gold rises marginally while silver sinks
Precious metals ended mixed on Wednesday, 13 May, 2009 at Comex. Gold registered little rise but silver prices sank. Prices almost fell today due to the rebounding dollar and slipping crude prices.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Wednesday, Comex Gold for June delivery gained $2 (0.2%) to close at $925.9 an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 3%. Year to date, gold prices are higher by 4.7%.
For the month of April, gold lost 3.7%, the second consecutive monthly drop. For the month of March, gold fell 2.1%, down for the first month in five. But the metal gained 4.3% in the first quarter. Before March, for the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (15%) since then.
On Wednesday, Comex silver futures for July delivery lost 19.5 cents (1.5%) at $14.02 an ounce. Year to date, silver has climbed 18.1% this year. For 2008, silver had lost 24%.
In the currency market on Wednesday, the greenback rebounded from its recent losses and the dollar index, which weighs the strength of dollar against the basket of six other currencies was up 0.7% at $82.621.
Crude prices fell on Wednesday. Prices fell by 83 cents to $58.02/barrel.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Last year, the weakening dollar and higher global demand for raw materials had led to records for commodities including gold. Gold reached a record in March 2008 as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the last move, the Federal Reserve has cuts its target bank lending rate to 0.25% from 5.25% in September, 2007. The Fed did it in nine steps.
Prior to 2008, gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for June delivery closed higher by Rs 200 (1.36%) at Rs 14,897 per 10 grams. Prices rose to a high of Rs 14,940 per 10 grams and fell to a low of Rs 14,708 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 108 (0.5%) lower at Rs 22,941/Kg. Prices opened at Rs 23,120/kg and fell to a low of Rs 22,724/Kg during the day's trading.
