Gold registers worst monthly drop in seven months
Bullion metal prices ended higher on Friday, 30 July 2010 at
Comex. A weaker than expected second quarter GDP report increased 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.
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 Friday, gold for December delivery ended at $1,183.9 an ounce, higher by $12.7 (1.1%) on the New York Mercantile Exchange. For the week, gold ended lower by a mere 0.3%.
Gold ended the month of July lower by 5%. It was the worst
monthly loss for gold since December 2009. Before this, it ended 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 8.9%.
On Friday, September Comex silver futures ended higher by 39 cents (2.2%) at $18 an ounce. For the week, silver ended almost unchanged. For the month of July 2010, silver shed 3.7%. 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 6.2%.
Data showed that U.S. economy expanded at an annualized rate of
2.4% in the second quarter, but that was a bit below the 2.5% that had
been widely expected and down from the first quarter's upwardly revised
3.7% growth rate. It was also well below the average 4.4% increase over
the past six months.
Additionally, personal consumption for the second quarter increased 1.6% after a 1.9% increase in the first quarter.
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.