Bullion metals turn pale

Strong dollar pushed precious metals lower

The strong dollar pushed bullion metals lower on Monday, 09 March, 2009. Prices fell after two days of consecutive rise last week.

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.

On Monday, Comex Gold for April delivery fell $24.7 (2.6%) to close at $918 an ounce on the New York Mercantile Exchange. Last week, the yellow metal remained almost unchanged. For the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 3.8%.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8.9%) since then.

On Monday, Comex silver futures for March delivery rose 38.3 cents (2.8%) to end at $12.95 an ounce. Last week, silver rose 1.7%. In February, 2009, silver had rose 4.3% after climbing 14% in January. Year to date, silver has climbed 17.5% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the dollar rose against most of its rivals. The dollar index, which measured the strength of the dollar against its six counterparts, rose 0.2% today.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.