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Tuesday, August 11, 2009

Precious metals lose more sheen

Gold and silver turn pale as gold holdings stand at lowest levels

Yellow metal prices fell once again on Monday, 10 August, 2009. Prices fell as the dollar continued to strengthen and also due to lower investment demand.

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 Monday, gold for December delivery ended at $946.9, lower by $12.6 (1.3%) 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 6.5%.

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 (11.6%) since then.

On Monday, Comex silver futures for September delivery lost 31.3 cents (2.1%) at $14.355 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 29.6% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the dollar index, a six-currency gauge of the greenback's value, rose by almost 0.6%.

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 127 (0.85%) at Rs 14,741 per 10 grams. Prices rose to a high of Rs 14,857 per 10 grams and fell to a low of Rs 14,690 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 355 (1.51%) lower at Rs 23,031/Kg. Prices opened at Rs 23,360/kg and fell to a low of Rs 22,893/Kg during the day's trading.

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