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Tuesday, October 06, 2009

Precious metals shine again

Prices rise for second consecutive day

Precious metal prices ended higher for second straight day on Monday, 05 October, 2009. Prices rose as dollar continued to stay weak for the entire day today.

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 $1,017.8, higher by $13.6 (1.3%) an ounce on the New York Mercantile Exchange. During intra day trading, gold rose to a high of $1,018.9. Last week, gold ended higher by 1.3%. Year to date, gold prices are higher by 15.3%.

Gold ended September, 2009 higher by 5.9%. For the third quarter it ended higher by 8.7%. 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 (2.5%) since then.

On Monday, Comex silver futures for December delivery rose 30.5 cents (1.9%) to $16.535 an ounce.

Silver ended 11.8% higher for September, 2009. Year to date, silver has climbed 47.4% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 1%. The US Dollar Index traded in negative territory all session, which provided modest price support to some commodities this morning. The dollar fell after finance ministers from the Group of Seven nations made no specific mention of the currency in a communiqué at their weekend meeting.

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

At the MCX, gold prices for December delivery closed higher by Rs 56 (0.35%) at Rs 15,659 per 10 grams. Prices rose to a high of Rs 15,679 per 10 grams and fell to a low of Rs 15,514 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 246 (0.94%) higher at Rs 26,312/Kg. Prices opened at Rs 25,972/kg and rose to a high of Rs 26,333/Kg during the day's trading.

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