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Friday, July 24, 2009

Precious metals pare early losses

Prices rise as dollar retreats back

Precious metal prices coughed up earlier losses and ended higher on Thursday, 23 July, 2009. Prices rose today in synchronization with US stocks and also as the dollar retreated.

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 Thursday, gold for August delivery ended at $954.8, higher by $1.5 (0.2%) an ounce on the New York Mercantile Exchange. Earlier it reached a high of $957.5. Last week, gold ended higher by 2.7%. Year to date, gold prices are higher by 7.6%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Thursday, Comex silver futures for September delivery rose 10 cents (0.8%) at $13.8 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 21.8% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar index, a six-currency gauge of the greenback's value, fell marginally paring early gains.

At Wall Street today, U.S. equities rose, sending the Dow Jones Industrial Average above 9,000 for the first time since January, after some companies reported earnings that topped analysts' estimates and home resales increased more than forecast.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 19 (0.13%) at Rs 14,920 per 10 grams. Prices rose to a high of Rs 14,993 per 10 grams and fell to a low of Rs 14,901 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 43 (0.19%) higher at Rs 22,433/Kg. Prices opened at Rs 22,420/kg and rose to a high of Rs 22,579/Kg during the day's trading.

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