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Friday, August 14, 2009

Precious metals edge up

Gold and silver gain as dollar slips

Precious metal prices rose on Thursday, 13 August, 2009 after the dollar slipped following disappointing US retail sales data. The dollar also fell today after the Federal Reserve said yesterday that it would keep interest rates low for some more time.

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 $956.5, higher by $4 (0.4%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by almost 0.4%. Year to date, gold prices are higher by 7.5%.

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 (7.5%) since then.

On Thursday, Comex silver futures for September delivery gained 40.5 cents (2.7%) to $14.99 an ounce. Last week, silver ended higher by 5.2%.

Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 32.3% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar index which weighs the value of dollar against a basket of six other currencies, fell by 0.4%.

Retail sales for July fell 0.1% when a 0.8% increase was expected. Excluding autos, sales were down a sharper-than-expected 0.6%. On the other hand, Wal-Mart provided better-than-expected earnings and a solid outlook.

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 higher by Rs 78 (0.52%) at Rs 14,938 per 10 grams. Prices rose to a high of Rs 14,984 per 10 grams and fell to a low of Rs 14,847 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 589 (2.51%) higher at Rs 23,988/Kg. Prices opened at Rs 23,362/kg and rose to a high of Rs 24,149/Kg during the day's trading.

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