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Friday, August 21, 2009

Gold turns pale

Silver remains flat as manufacturing data does not disappoint

Yellow metal prices fell on Thursday, 20 August, 2009. Prices fell today as manufacturing data in US checked in better than expected taking US dollar higher. But silver ended marginally higher.

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 December delivery ended at $941.7, lower by $3.1 (0.3%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by almost 1.1%. After four consecutive weekly gains, this was yellow metal's first weekly drop. Year to date, gold prices are higher by 6.1%.

Gold ended July, 2009 higher by 2.8%. Before this, 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 (9%) since then.

On Thursday, Comex silver futures for September delivery rose marginally by 1 cents (0.01%) to $13.88 an ounce. Last week, silver ended higher by 0.23%.

Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 25% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index which weighs the value of dollar against a basket of six other currencies, rose by 0.2%.

The Federal Reserve Bank of Philadelphia reported on Thursday, 21 August, 2009 that manufacturing firms in the Philadelphia region improved in August, the first increase in nearly a year. The Philly Fed index rose to 4.2 in August from negative 7.5 in July. It was the highest reading since November 2007 and the first positive reading since September 2008.

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

At the MCX, gold prices for October delivery closed lower by Rs 40 (0.27%) at Rs 14,897 per 10 grams. Prices rose to a high of Rs 14,947 per 10 grams and fell to a low of Rs 14,860 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 8 (0.03%) lower at Rs 22,890/Kg. Prices opened at Rs 22,851/kg and fell to a low of Rs 22,767/Kg during the day's trading.

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