Prices shoot up as dollar slips
Precious metals ended substantially higher on Tuesday, 28 December 2010 at Comex. Prices shot up as the dollar fell considerably during the day.
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. But bullion metals have registered increase in prices despite strong dollar in recent times and vice versa.
On Tuesday, gold for February delivery rose by $22.7 (1.6%) ending at $1,405.6 an ounce on the New York Mercantile Exchange. During intra day trading, it touched a high of $1,407.9. Last week, gold ended almost unchanged. In December, gold had struck a new all time high of $1,416.1.
Gold prices had been doing
well since late August on expectations that Federal Reserve efforts at
monetary stimulus will depress the dollar, making gold more valuable as
an alternative store of wealth.
Gold ended the month of
November higher by 2.1%. It had ended October 2010 higher by 3.8%.
Before this, it ended September 2010 and the third quarter higher by 5%.
It was eighth consecutive quarterly gain for gold. For the second
quarter, gold ended up by 12%. For the first quarter of this year, gold
rose by 1.7%. On a year to date basis, gold is higher by 28%.
On Tuesday, December Comex silver futures ended higher by $1.07 (3.6%) at $30.27. Prices gained 0.7% last week. It gained 15% in November.
Before this, for the month of October, silver gained 13%, its
third consecutive monthly gain. In September, silver ended higher by
12%. For the third quarter, silver gained nearly 18%. 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 77%.
In the currency market on Tuesday, the dollar index, which
measures the strength of the dollar against a basket of six other
currencies, slipped by 0.4%.
At the MCX, gold prices for February delivery closed higher by Rs 197 (0.96%) at Rs 20,708 per ten grams. Prices rose to a high of Rs 20,718 per 10 grams and fell to a low of Rs 20,520 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 1,216 (2.7%) higher at Rs 45,586/Kg. Prices opened at Rs 44,415/kg and rose to a high of Rs 45,650/Kg during the day's trading.