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Wednesday, November 18, 2009

Precious metals end almost flat

Gold manages to eke out fractional gains 


Precious metal, gold prices, rose marginally higher on Tuesday, 17 November, 2009. Prices rose as the dollar, which was strong in the earlier part of the day, failed to stick to its gains. The economic data for the day did not provide much support to thedollar. Silver ended fractionally lower.

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 Tuesday, gold for December delivery ended at $1,139.4, higher by $0.2 (0.02%) an ounce on the New York Mercantile Exchange. It traded lower for most of the session. Last week, gold ended higher by 2%. Year to date, gold prices are higher by almost 30%.

On Tuesday, December Comex silver futures ended lower by just 1 cent (0.001%) $18.39 an ounce.

In the currency market on Tuesday, the dollar rose against most of its major rivals, including the euro and the Japanese yen. But the dollar came off earlier highs as investors shook off some hesitations seen in the wake of the mixed U.S. economic data.

The Commerce Department in US reported on Tuesday, 17 November, 2009 that the PPI index, including food and energy goods, rose a seasonally adjusted 0.3% in October. The PPI has fallen 1.9% in the past year, while the core PPI has risen 0.7%. Separately, Federal Reserve data showed that the output of the nation's factories, mines and utilities rose 0.1% in October.

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 98 (0.58%) at Rs 17,022 per ten grams. Prices rose to a high of Rs 17,040 per 10 grams and fell to a low of Rs 16,927 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 165 (0.6%) higher at Rs 28,064/Kg. Prices opened at Rs 27,870/kg and rose to a high of Rs 28,133/Kg during the day's trading.
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