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Thursday, December 03, 2009

Bullion metals register new highs

Gold reaches an all time high of $1,217 an ounce 


Precious metal prices marked new highs on Wednesday, 02 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 day thereby imparting more glitter to precious metals.

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 Wednesday, gold for December delivery ended at $1,212 an ounce, higher by $12.9 (1.1%) an ounce on the New York Mercantile Exchange. Earlier during the day, it rose to an intra day high of $1217.3 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%.

On Wednesday, December Comex silver futures ended higher by 11.8 cents (0.6%) at $19.295 an ounce. For the month of November, 2009, silver rose 14%.

In the currency market on Wednesday, the dollar tried to gather some strength against some of its counterparts but overall, it remained weak. 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%.

Worries over Dubai's debt crisis eased on Monday after the central bank of the United Arab Emirates said during the weekend that it will make available a special liquidity facility for banks of the city state. Dubai World, the largest corporate entity in the Persian Gulf emirate, asked creditors last week for a six-month stay on repayment of $60 billion in debts.

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 higher by Rs 230 (1.3%) at Rs 18,187 per ten grams. Prices rose to a high of Rs 18,240 per 10 grams and fell to a low of Rs 17,988 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 250 (0.85%) higher at Rs 29,584/Kg. Prices opened at Rs 29,347/kg and rose to a high of Rs 29,779/Kg during the day's trading.
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