Prices get boost from uncertainty surrounding Greece and its rescue package
A sharp increase in volatility and widespread weakness among
stocks sent many market participants into gold at Comex on Friday, 30
April 2010. Silver was also up, but not quite as strong. Precious
metals got a boost from fears and uncertainty still surrounding Greece
and its rescue package. The weak dollar also aided in rise in prices
further.
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 Friday, gold for June delivery ended at $1,180.7 an ounce,
higher by $11.9 (1%) an ounce on the New York Mercantile Exchange. Gold
for June delivery settled above $1,200 in early December, only to pull
back to $1,172 area and dip as much as the $1,050 vicinity in early
February. For the week, gold ended higher by 2.3%. For the month of
April, gold ended higher by 6%. 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 7.7%.
On Friday, May Comex silver futures ended higher by 32 cents
(0.6%) at $18.63 an ounce. For the week, silver ended higher by 2.4%.
For the month of April, silver ended higher by 4.1%. For the first
quarter of this year, silver rose by 3%. On a year to date basis,
silver is higher by 7.1%.
In the currency market on Friday, the dollar index, which
measures the strength of the dollar against basket of six other
currencies initially fell by 0.3%. The dollar still finished the week
with a 0.6% gain, which puts it up 0.5% for the month and up some 5%
for the year.
Stiff selling at Wall Street on Friday resulted in the stock
market's worst weekly loss since January and marked a weak finish to
April. Still, the stock market was able to book its third straight
monthly gain. The early tone of trade was tepid as market participants
made little response to news that the first quarter GDP hit an
annualized rate of 3.2%. The headline number was essentially on par
with the 3.3% increase that had been widely expected.
Separately, the Reuters/University of Michigan consumer
sentiment index showed that U.S. consumer sentiment improved marginally
in late April after sinking earlier in the month. The index rose to
72.2 from 69.5 in mid-April. Market had expected an increase to about
71. March's final reading was 73.6. The index has been largely
unchanged since November, remaining at depressed levels.
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.