Prices rise as dollar drops against competitors
Precious metal prices rose for third straight session on
Monday, 11 January 2010. Prices rose as dollar slipped following
reports in the market about Federal Reserve insisting to keep interest
rates low currently in the US market. The same enhanced the appeal of
precious metal as an alternate investment. Strong trade data from China
also boosted prices.
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 February delivery ended at $1,151.4 an
ounce, higher by $12.5 (1.1%) an ounce on the New York Mercantile
Exchange. Last week, it had ended higher 3.9%. Year to date in FY 2010,
gold has risen by almost 5%.
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 Monday, March Comex silver futures ended higher by 23
cents (1.2%) at $18.7 an ounce. Last week, silver ended higher by 9.6%.
Year to date in FY 2010, silver has risen by almost 10.8%.
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 Monday, the dollar index, which
weighs the strength of dollar against the basket of six other
currencies fell by almost 0.8%. It fell to a three-week low against the
euro today.
Yesterday, Chinese government report showed that exports
climbed for the first time in 14 months and imports reached record
highs. China's imports surged 55.9% in December, while exports rose
17.7% from the same period a year ago. In addition, China's Finance
Minister pledged to spend the full amount of planned stimulus in 2010,
despite improvements in its economy and efforts to control bank
lending.
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 131 (0.55%) at Rs 17,031 per ten grams. Prices rose to a high of
Rs 17,104 per 10 grams and fell to a low of Rs 16,911 per 10 grams
during the day's trading.
At the MCX, silver prices for March delivery closed Rs 196
(0.69%) higher at Rs 28,434/Kg. Prices opened at Rs 28,280/kg and rose
to a high of Rs 28,590/Kg during the day's trading.