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Friday, December 04, 2009

Bullion metals end mixed

Gold extends its gains while silver falters 


Yellow metal prices extended their gains on Thursday, 03 December, 2009. Prices rose due to strong demand for precious metals and also as the dollar continued to stay weak. The dollar remained relatively weak for the rest of the day after rising earlier during the day. But silver fell for the day.

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 $1,217.4 an ounce, higher by $5.4 (0.4%) an ounce on the New York Mercantile Exchange. Earlier during the day, it rose to an intra day high of $1226.3 an ounce.

Gold ended November, 2009 higher by 13%. Gold just lost in three sessions in the entire month of November. Before that, for the third quarter it ended higher by 8.7%. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year. On a year to date basis, gold price is higher by 37.5%.

On Thursday, December Comex silver futures ended lower by 19.3 cents (1%) at $19.102 an ounce. For the month of November, 2009, silver rose 14%.

In the currency market on Thursday, the dollar tried to gather some strength against some of its counterparts earlier during the day following couple of economic reports. But then, the dollar fell after European Central Bank President Jean-Claude Trichet confirmed the bank's tender offer this month will be the last as it gradually phases out special liquidity measures. The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by almost 0.2%. Year to date, the dollar index has dropped by almost 8%.

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

At the MCX, gold prices for February delivery closed lower by Rs 9 (0.04%) at Rs 18,178 per ten grams. Prices rose to a high of Rs 18,364 per 10 grams and fell to a low of Rs 18,055 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 336 (1.15%) lower at Rs 29,248/Kg. Prices opened at Rs 29,621/kg and fell to a low of Rs 28,977/Kg during the day's trading.
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