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Monday, August 24, 2009

Precious metals shine

Gold ends higher for the week but silver drops

Precious metal prices rose on Friday, 21 August, 2009. Prices rose as the dollar weakened. Prices also gained as Federal Reserve Chairman Ben Bernanke said the global economy was emerging from recession and U.S. home resale rose for a fourth straight month. Gold eked out weekly gains too. But silver dropped for the week.

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 Friday, gold for December delivery ended at $954.7, higher by $13 (1.4%) an ounce on the New York Mercantile Exchange. For the week, gold ended higher by almost 0.6%. 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 (9%) since then.

On Friday, Comex silver futures for September delivery rose by 28 cents (2%) to $14.164 an ounce. For the week, silver ended lower by 3.9%.

Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 27% this year. For 2008, silver had lost 24%.

In the currency market on Friday, the dollar index which weighs the value of dollar against a basket of six other currencies, fell by 0.3%.

The National Association of Realtors in USA reported on Friday, 21 August, 2009 that resales of U.S. single-family homes and condos rose 7.2% in July to a seasonally adjusted annual rate of 5.24 million, the highest level since August, 2007.

Market had expected sales to rise to an annual rate of 5 million, from a June reading of 4.89 million. Regionally, July's resales rose 13.4% in the Northeast, 10.9% in the Midwest, and 7.1% in the South. Resales were down 1.7% in the West. The report detailed that the inventory of unsold homes remained high, rising 7.3% to 4.09 million in July.

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

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