HOME         WEBSITE         SUBSCRIBE           E-GREETINGS   
                               

Friday, February 12, 2010

Precious metals drop


Prices shed some glaze as dollar heads up

Precious metal prices turned pale on Wednesday, 10 February 2010. A strong dollar decreased the appeal of precious metals as an alternate investment.

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 April delivery ended at $1,076.3 an ounce, lower by $0.90 (0.08%) an ounce on the New York Mercantile Exchange. During intra day trading, gold dropped by almost 1.3% earlier during the day. Last week, gold lost 2.9%. For January 2010, gold lost 1.2%. Year to date, gold has shed 1.6%.

On Wednesday, March Comex silver futures ended lower by 13.5 cents (0.9%) at $15.3 an ounce. Last week, silver ended lower by 7.8%. In January 2010, silver shed 3.9%.Year to date in FY 2010, silver has dropped by almost 8.6%.

In the currency market on Wednesday, the dollar went up amid ongoing speculation about loan guarantees for Greece and a hint at a rate hike from Fed Chairman Ben Bernanke. The dollar index, which weighs the strength of dollar against the basket of six other currencies, went up by almost 0.5%. It rose almost 0.9% against the euro. The greenback has jumped 1% this month on concern that fiscal gaps in Greece, Spain and Portugal may widen.

Fed Chairman Bernanke today indicated in a prepared statement for a testimony before the House Financial Services Committee that the Fed might opt to raise the discount rate before long. Though Bernanke's statement was released, his actual testimony has been postponed.

Precious metal prices started slipping since past couple of weeks due to impending worries from China front where tightening monetary policies are bothering investors due to shaky demand of metals in coming months.

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 42 (0.25%) at Rs 16,277 per ten grams. Prices rose to a high of Rs 16,372 per 10 grams and fell to a low of Rs 16,163 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 252 (1%) lower at Rs 24,263/Kg. Prices opened at Rs 24,501/kg and fell to a low of Rs 24,024/Kg during the day's trading.

Blog Archive

____________________________________________________________________________________________

Disclaimer - All investments in Mutual Funds and securities are subject to market risks and uncertainty of dividend distributions and the NAV of schemes may go up or down depending upon factors and forces affecting securities markets generally. The past performance of the schemes is not necessarily indicative of the future performance and may not necessarily provide a basis for comparison with other investments. Investors are advised to go through the respective offer documents before making any investment decisions. Prospective client(s) are advised to go through all comparable products in offer before taking any investment decisions. Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the fund will be achieved. Information gathered & material used in this document is believed to be from reliable sources. Decisions based on the information provided on this newsletter/document are for your own account and risk.


In the preparation of the material contained in this document, Varun Vaid has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the Varun Vaid and which may have been made available to Varun Vaid. Information gathered & material used in this document is believed to be from reliable sources. Varun Vaid however does not warrant the accuracy, reasonableness and/or completeness of any information. For data reference to any third party in this material no such party will assume any liability for the same. Varun Vaid does not in any way through this material solicit any offer for purchase, sale or any financial transaction/commodities/products of any financial instrument dealt in this material. All recipients of this material should before dealing and or transacting in any of the products referred to in this material make their own investigation, seek appropriate professional advice.


Varun Vaid, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on the basis of this material. All recipients of this material should before dealing and/or transacting in any of the products referred to in this material make their own investigation, seek appropriate professional advice. The investments discussed in this material may not be suitable for all investors. Any person subscribing to or investigating in any product/financial instruments should do soon the basis of and after verifying the terms attached to such product/financial instrument. Financial products and instruments are subject to market risks and yields may fluctuate depending on various factors affecting capital/debt markets. Please note that past performance of the financial products and instruments does not necessarily indicate the future prospects and performance there of. Such past performance may or may not be sustained in future. Varun Vaid, including persons involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation in the financial instruments/products/commodities discussed here in or act as advisor or lender / borrower in respect of such securities/financial instruments/products/commodities or have other potential conflict of interest with respect to any recommendation and related information and opinions. The said person may have acted upon and/or in a manner contradictory with the information contained here. No part of this material may be duplicated in whole or in part in any form and or redistributed without the prior written consent of Varun Vaid. This material is strictly confidential to the recipient and should not be reproduced or disseminated to anyone else.


Varun Vaid also does not take any responsibility for the contents of the advertisements published. Readers are advised to verify the contents on their own before acting there upon.


Published Credits goes to following sources & all the mentioned sources as footer below the published material- Bloomberg, Valueresearch Online, Capital Market, Navindia, Franklin Templeton, Kitco, SBI AMC, LIC AMC, JM Financial AMC, HDFC AMC, The Hindu, Business Line, Personal FN, Economic Times, Reuters, Outlook Money, Business Standard, Times of India etc.