Prices rise as Indian wedding season nears
Bullion metal prices ended higher on Thursday, 05 August 2010 at Comex.
A weaker than expected initial claims data increased the appeal of precious metals as an alternate investment. Physical demand of precious metals
also rose in anticipation of India's wedding season, starting later
this month, as jewelers are expected to snap up the metal at bargain prices ahead of the festivities.
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 December delivery ended at $1,199.3 an ounce, higher by $3.4 (0.3%) on the New York Mercantile Exchange. During intra day trading, prices touched a high of $1,202.8 and fell to a low of $1,192. Prices rose for seven consecutive sessions. Last 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 10.2%.
On Thursday, September Comex silver futures ended higher by 4
cents (0.2%) at $18.32 an ounce. Last 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 3.9%.
Earlier during the week, China announced moves to broaden its gold market, including letting more banks to import and export gold and creating more yuan-denominated gold derivatives.
Among the economic data expected for the day, The Labor
Department in US reported on Thursday, 05 August 2010 that the number of
people applying for initial unemployment benefits jumped 19,000 to
479,000 in the latest week to the highest level since early April. The
figure was higher than expected. Claims are 5.5% higher compared to the
end of 2009. The four-week average of initial claims, a better gauge of
employment trends than the volatile weekly number rose by 5,250 to
453,250.
The report detailed that the number of workers who continue to
receive unemployment checks, meanwhile, fell by 34,000 to 4.54 million
in the week ended 24 July 2010. The four-week average of continuing
claims increased by 25,750 to 4.58 million.
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 higher by Rs 37 (0.2%) at Rs 18,109 per ten grams. Prices rose to a high of Rs 18,128 per 10 grams and fell to a low of Rs 18,025 per 10 grams during the day's trading.
At the MCX, silver prices for September delivery closed Rs 53 (0.2%) higher at Rs 29,014/Kg. Prices opened at Rs 28,977/kg and rose to a high of Rs 29,118/Kg during the day's trading.
