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Tuesday, September 29, 2009

Precious metals end higher

Volatile dollar keeps gains under check

Precious metal prices ended higher on Monday, 28 September, 2009. Prices rose in synchronization with stocks at Wall Street. But dollar's movement kept the gains under control.

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 $994.1, higher by $2.5 (0.25%) an ounce on the New York Mercantile Exchange. Earlier during the day, it rose to a high of $998 and also fell to a low of $986 during intra day trading. Last week, gold ended lower by 1.9%. Year to date, gold prices are higher by 13%.

Gold ended August, 2009 higher by 0.2%. 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 (4%) since then.

On Friday, Comex silver futures for December delivery rose 14 cents (0.8%) to $16.2 an ounce.

Silver ended 7.1% higher for August, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 46% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the dollar remained extremely volatile. The dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 1.5% earlier during the day but then erased most of its gains.

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

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