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Friday, August 07, 2009

Precious metals end lower

Gold and silver drop as dollar strengthens

Precious metal prices fell on Thursday, 06 August, 2009. Prices fell as the dollar strengthened as central banks in Europe continued to loosen their monetary policy.

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 $960.70, lower by $3.5 (0.4%) an ounce on the New York Mercantile Exchange. During intra day trading, it hit a high of $971.7. Last week, gold ended almost unchanged. Year to date, gold prices are higher by 8.2%.

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 (9.9%) since then.

On Thursday, Comex silver futures for September delivery fell 11.5 cents (0.8%) at $14.645 an ounce. Last week, silver ended higher by 0.5%.

Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 31.5% 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, rose by almost 0.5%.

The Labor Department reported today those first-time claims for state unemployment benefits declined by 38,000 to 550,000 last week. The four-week average of new jobless claims dropped to 555,250, the lowest level since January.

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 3 (0.02%) at Rs 14,915 per 10 grams. Prices rose to a high of Rs 15,020 per 10 grams and fell to a low of Rs 14,865 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 15 (0.06%) lower at Rs 23,372/Kg. Prices opened at Rs 23,350/kg and fell to a low of Rs 23,263/Kg during the day's trading.

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