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Thursday, August 06, 2009

Precious metals end mixed

Gold drops but silver gains as dollar pares early gains

Yellow metal prices fell from their two month high levels on Wednesday, 05 August, 2009. Prices fell as the dollar strengthened following the private sector job report. But silver managed to rise.

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, gold for August delivery ended at $964.2, lower by $3.3 (0.3%) an ounce on the New York Mercantile Exchange. Last week, gold ended almost unchanged. Year to date, gold prices are higher by 8.6%.

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 (9.5%) since then.

On Wednesday, Comex silver futures for September delivery gained 6.5 cents (0.4%) at $14.76 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 30.7% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar index, a six-currency gauge of the greenback's value, rose in the early trading hours. It however slipped while the session was nearing its end.

Before market opened today, the latest ADP Employment Report indicated that 371,000 jobs were slashed in July, but that was greater than the 350,000 job losses that had been forecast. Meanwhile, job losses for June were revised lower to reflect 463,000 job cuts.

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 19 (0.13%) at Rs 14,912 per 10 grams. Prices rose to a high of Rs 14,950 per 10 grams and fell to a low of Rs 14,851 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 140 (0.6%) higher at Rs 23,387/Kg. Prices opened at Rs 23,252/kg and rose to a high of Rs 23,498/Kg during the day's trading.

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