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Wednesday, April 14, 2010

Precious metals add some glaze

Gold manages to touch fresh four month high 

Precious metal prices ended higher on Monday, 12 April 2010. Prices rose on anticipation of higher demand and as the dollar weakened. 

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 June delivery ended at $1,162.2 an ounce, higher by $0.30 (0.3%) an ounce on the New York Mercantile Exchange. During intra day trading, gold reached a high of $1,170.7. This was fresh four-month high level reached by the yellow metal. Last week, gold ended higher by 3.2%. In FY 2010, gold touched a high of $1,154 in January. For the month of March, gold slid 0.4%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 6.1%. 

On Monday, May Comex silver futures ended higher by 6 cents (0.3%) at $18.41 an ounce. Last week, silver gained 2.6%. For the month of March, silver ended higher by 5%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 7.9%.
In the currency market on Monday, the dollar index, which measures the strength of the dollar against basket of six other currencies fell by almost 0.5%. The euro rose against the greenback as the European countries decided to provide a lifeline to Greece over the weekend. The euro rose to three week high against the dollar. The dollar index gained about 0.7% in March and rallied 4% during the first quarter. The dollar index has gained 4.5% this year till date. 

Last Friday, Fitch Ratings had downgraded Greece's credit ratings to the lowest ring of investment-grade ratings, BBB minus. 

Also on Monday, Goldman Sachs lowered its 2010 forecast for gold prices to $1,165 an ounce and its 2011 forecast to $1,350 an ounce. The investment bank in December had forecast gold at an average price of $1,265 an ounce in 2010 and a 2011 average price forecast of $1,425 an ounce. 

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 June delivery closed higher by Rs 81 (0.48%) at Rs 16,906 per ten grams. Prices rose to a high of Rs 16,977 per 10 grams and fell to a low of Rs 16,834 per 10 grams during the day's trading. 

At the MCX, silver prices for May delivery closed Rs 103 (0.37%) higher at Rs 27,847/Kg. Prices opened at Rs 27,768/kg and rose to a high of Rs 28,230/Kg during the day's trading.
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