Prices rise as dollar stays weak following disappointing data
Precious metal prices rose once again on Thursday, 14 January
2010. Prices rose as the dollar stayed relatively weak for the entire
day after disappointing batch of economic data.
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 February delivery ended at $1,143 an
ounce, higher by $6.2 (0.5%) an ounce on the New York Mercantile
Exchange. Earlier during the day, it rose to a high of $1146.7 and fell
to a low f $1130.7. Last week, it had ended higher 3.9%. Year to date
in FY 2010, gold has risen by almost 4.3%.
Last year, after hitting a low at $807.30 per ounce on 15
January 2009, gold futures rallied almost 51% to hit an all-time high
at $1217.40 per ounce during early December of 2009 but fell from those
levels at the end.
On Thursday, March Comex silver futures ended higher by 11
cents (0.6%) at $18.66 an ounce. Last week, silver ended higher by
9.6%. Year to date in FY 2010, silver has risen by almost 11.3%.
Silver futures had hit a low at $10.42 on 15 January 2009 and
hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver
also ended lower than its all time high level.
In the currency market on Thursday, the dollar index, which
weighs the strength of dollar against the basket of six other
currencies erased earlier gains and fell by almost 0.1%.
The Commerce Department in US reported on Thursday, 14
January 2010 that U.S. retail sales was disappointing in December,
falling a seasonally adjusted 0.3% on widespread weakness across
different kinds of stores. The decline was unexpected. Market was
forecasting a 0.5% gain.
Separately, the Labor Department in US reported on Thursday,
14 January 2010 that first-time jobless claims rose last week by the
largest amount in five weeks. Initial claims rose by 11,000 to 444,000
in the week ended 9 January 2010. This was the highest level since
mid-December.
Gold had ended FY 2009 higher by 24%. Silver futures had
ended 2009 up 50%. The dollar index had lost 4.2% against its
counterparts last year.
At the MCX, gold prices for February delivery closed higher
by Rs 101 (0.6%) at Rs 16,894 per ten grams. Prices rose to a high of
Rs 16,925 per 10 grams and fell to a low of Rs 16,811 per 10 grams
during the day's trading.
At the MCX, silver prices for March delivery closed Rs 108
(0.4%) higher at Rs 28,406/Kg. Prices opened at Rs 28,399/kg and rose
to a high of Rs 28,459/Kg during the day's trading.