Prices shed glaze as weak data pushes up dollar
Precious metal prices ended lower for second straight day on Tuesday, 23 February 2010. Prices slipped as the dollar strengthened due to weak economic data that hit the wires today.
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 $1,103.2 an ounce, lower by $9.9 (0.9%) an ounce on the New York Mercantile Exchange. Last week, gold gained 3.1%. For January 2010, gold lost 1.2%. Year to date, gold is higher by 0.8%.
On Tuesday, March Comex silver futures ended lower by 33 cents (2%) at $15.89 an ounce. Last week, silver ended higher by 4.1%. In January 2010, silver shed 3.9%. Year to date in FY 2010, silver has dropped by almost 3.9%.
In the currency market on Tuesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by more than 3%.
Among the major economic data expected for the day, the Conference Board reported on Tuesday that consumer confidence
fell sharply in February as Americans turned more pessimistic about job
prospects and the U.S. economy. Just a month after touching a 16-month
high, theconsumer Confidence index sank 11 points to 46.0 from an upwardly revised 56.5 in January. It's the lowest reading since April 2009.
The World Gold Council reported last week that demand for gold
climbed 2.6% in the fourth quarter from the prior three-month period.
Gold consumption increased to 819.7 metric tons with prices averaging
15% more on a quarter-to-quarter basis. Conversely, demand for gold
fell 24% in the fourth quarter from a year ago, and was down 11% in
2009 versus the year earlier.
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.
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.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.
At the MCX, gold prices for April delivery closed lower by Rs
101 (0.6%) at Rs 16,591 per ten grams.
Prices rose to a high of Rs
16,767 per 10 grams and fell to a low of Rs 16,557 per 10 grams during
the day's trading.
At the MCX, silver prices for March delivery closed Rs 406
(1.6%) lower at Rs 24,854/Kg. Prices opened at Rs 25,333/kg and fell to
a low of Rs 24,780/Kg during the day's trading.
