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Wednesday, January 27, 2010

Bullion metals end mixed


Gold rises but silver slips

Precious metal prices ended on a mixed mode on Tuesday, 26 January 2010. Gold prices rose as consumer confidence showed increase in January. But silver prices dropped.

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 April delivery ended at $1,099.5 an ounce, higher by $2.7 (0.2%) an ounce on the New York Mercantile Exchange. Earlier during the day prices dropped. Last week, prices ended lower by 2.4%. Year to date in FY 2010, gold prices are higher by 0.5%.

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 Tuesday, March Comex silver futures ended lower by 28.5 cents (1.6%) at $16.86 an ounce. Last week, silver ended lower by 8.1%. Year to date in FY 2010, silver has risen by almost 0.3%.

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 Tuesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.3%.

The Conference Board reported on Tuesday, 26 January 2010 that U.S. consumer confidence index rose to a 16-month high in January 2010. The report detailed that consumer confidence index rose to 55.9 in January from an upwardly revised 53.6 in December. Market was expecting a figure around 53.5. It's the highest reading since September 2008, when the financial crisis intensified. It was the third straight increase for consumer confidence.

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.


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