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Thursday, August 27, 2009

Precious metals turn little pale

Prices drop due to the strong dollar

Precious metal prices fell on Wednesday, 26 August, 2009. Prices fell today due to the strong dollar.

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 December delivery ended at $945.8, lower by $0.20 (0.02%) an ounce on the New York Mercantile Exchange. During intra day trading, it fell to a low of $941.2. Last week, gold ended higher by almost 0.6%. 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 (9%) since then.

On Wednesday, Comex silver futures for September delivery fell by 5.5 cents (0.4%) to $14.255 an ounce. Last 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 28% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar firmed up during the day. The dollar index which weighs the value of dollar against a basket of six other currencies rose by 0.7%.

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 68 (0.45%) at Rs 15,032 per 10 grams. Prices rose to a high of Rs 15,045 per 10 grams and fell to a low of Rs 14,977 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 47 (0.2%) higher at Rs 23,381/Kg. Prices opened at Rs 23,423/kg and rose to a high of Rs 23,546/Kg during the day's trading.

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