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Friday, September 25, 2009

Precious metals turn paler

Weak housing report takes dollar up

Precious metal prices continued to turn pale on Thursday, 24 September, 2009. Prices fell today after dollar firmed up following weaker than expected housing report.

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 Thursday, gold for December delivery ended at $998.9, lower by $15.5 (1.5%) an ounce on the New York Mercantile Exchange. Earlier during the day, it rose to a high of $1,021 and also fell to a low of $991.3 during intra day trading. Last week, gold ended higher by 0.4%. Year to date, gold prices are higher by 13.5%.

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 (4.3%) since then.

On Thursday, Comex silver futures for December delivery fell 61 cents (3.6%) to $16.31 an ounce. Last week, silver ended higher by 2.2%.

Silver ended 7.1% higher for August, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 45.2% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.6%.

The National Association of Realtors in US reported on Thursday, 24 September, 2009 that resales of U.S. homes dropped 2.7% in August to a seasonally adjusted annual rate of 5.1 million, the first decline in five months. Sales fell in three of four regions last month, with only the West showing a small increase of 2.7%.

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 lower by Rs 238 (1.5%) at Rs 15,599 per 10 grams. Prices rose to a high of Rs 15,870 per 10 grams and fell to a low of Rs 15,550 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 905 (3.3%) lower at Rs 26,232/Kg. Prices opened at Rs 27,095/kg and fell to a low of Rs 26,155/Kg during the day's trading.

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