Gold ends lower

Silver prices register almost 8% drop

Gold prices were little changed today, Wednesday, 15 October, 2008 as traders speculated that global meltdown will reduce the demand of the precious metal. But gold prices fluctuated throughout the day as US stocks once again sunk today. Investors generally tend to seek safety in gold when the economy falls into turmoil and vice versa. Silver prices also fell today.

On Wednesday, Comex Gold for December delivery fell $0.50 (0.05%) to close at $839 an ounce on the New York Mercantile Exchange. Prices rose to a high of $859.2 and fell to a low of $833.1. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly since then. Last week, gold prices ended higher by 3.1%.

This year, gold prices have gained 0.2% till date. For the third quarter ended September, 2008, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.

On Wednesday, Comex silver futures for December delivery fell 88 cents (8%) to $10.18 an ounce. Till date, silver has lost 34% this year. Silver had ended month and quarter of September 2008 with a loss of 10%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. The metal also had gained for seven straight years.

In the US stock market on Wednesday, 15 October, the Dow fell by another 750 points despite good earning reports from Coco Cola, JP Morgan Chase and Intel. Drop in retail sales for month of September was responsible for today’s weakness in stocks as it once again highlighted limited spending ability of today’s US consumers.

The Commerce Department reported today that U.S. retail sales fell 1.2% in September, 2008, the worst drop in three years and the third decline in a row. It just sent another signal that the US economy has sunk into a recession. The 1.2% decline came against a forecast figure of 0.8% decline.

Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.

At the MCX, gold prices for December delivery closed higher by Rs 106 (0.81%) at Rs 13,185 per 10 grams. Prices rose to a high of Rs 13,399 per 10 grams and fell to a low of Rs 13,020 per 10 grams during the day’s trading.

At the MCX, silver prices for December delivery closed Rs 714 (3.8%) lower at Rs 18,055/Kg. Prices opened at Rs 18,850/kg and fell to a low of Rs 17,955/Kg during the day’s trading.