Bullion metal prices ended lower on Thursday, 08 July 2010 at
Comex. Prices fell after the initial claims report by Labor Department,
which fed into hopes that the U.S. labor
market is on the mend thereby reducing 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. Recently, the embattled euro has played stronger
role in moving prices rather than dollar fluctuation. Bullion metals
have registered increase in prices despite strong dollar in recent times
and vice versa.
On Thursday, gold for August delivery ended at $1,196.1 an
ounce, lower by $2.8 (0.2%) an ounce on the New York Mercantile
Exchange. Bullion fell after the claims report, which fed into hopes
that the U.S. labor market is on the mend. At the same time, lingering
doubts about so-called stress tests to be conducted on the largest
European banks, as well as about the pace of economic recovery, provided
some support for gold. Last week, gold ended lower by 4%.
Gold ended the month of June higher by 2.5%. For the second
quarter, gold ended up by 12%, its seventh consecutive quarterly gain.
For the first quarter of this year, gold rose by 1.7%. On a year to date
basis, gold is higher by 10.2%.
On Thursday, September Comex silver
futures ended lower by 13 cents (0.7%) at $17.87 an ounce. Last
week, silver ended lower by 7%. For the second quarter, silver ended
higher by 3.1%. For the first quarter of this year, silver rose by 3%.
On a year to date basis, silver is higher by 1.6%.
The Labor Department in US reported on Thursday, 08 July 2010
that the number of people filing first-time claims for unemployment
benefits sank 21,000 in the latest week to a still-high 454,000,
maintaining a recent see-saw pattern. Market expected a figure around
460,000.
Late Wednesday, the International Monetary Fund raised its
outlook for global economic growth for 2010 and pegged its forecast for
U.S. growth at 3.3%. However, the IMF's updated estimate also warned of
looming risk coming out of Europe's debt issues.
China's yesterday's comment that it was not boosting its gold
positions hurt markets.
Investors were also disturbed by reports that
the Bank for International Settlement, the central bank of the world's
central banks, had allowed for a record number of gold swaps.
China's foreign-exchange regulator said its central bank would not
increase its position in gold, citing limited global bullion supply and price volatility.
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 August delivery closed lower by Rs
54 (0.3%) at Rs 18,313 per ten grams. Prices rose to a high of Rs 18,466
per 10 grams and fell to a low of Rs 18,225 per 10 grams during the
day's trading.
At the MCX, silver prices
for September delivery closed Rs 176 (0.6%) lower at Rs 28,734/Kg.
Prices opened at Rs 28,950/kg and fell to a low of Rs 28,582/Kg during
the day's trading.
