Bullion metals register decent gains

Weak dollar and weak economic reports impart more shine to bullion metals

Weak set of economic reports and weak dollar continued to boost the appeal of precious metals as a safe bet for investment taking bullion metals higher on Friday, 24 April, 2009.

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 Friday, Comex Gold for June delivery gained $7.5 (0.8%) to close at $914.1 an ounce on the New York Mercantile Exchange. For the week, gold ended higher by 5.3%. Year to date, gold prices are higher by 3.3%.

For the month of March, gold fell 2.1%, down for the first month in five. But the metal gained 4.3% in the first quarter. Before March, for the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (15%) since then.

On Friday, Comex silver futures for May delivery gained 16.5 cents (1.3%) at $12.92 an ounce. Year to date, silver has climbed 13.2% this year. For 2008, silver had lost 24%.

In addition to the above, it was reported on Friday that China has increased its gold reserves by 76% in six years to 1,054 tons. The country has now the fifth- largest gold stockpile by country, behind Italy's 2,451.8 tons, according to data compiled by the World Gold Council.

The IMF forecast earlier during the month a 1.3% decline in the world economy, compared with a 0.5% expansion estimated in January, and said growth will be slower next year than previously expected. As per the report, the UK will see its economy shrink by 4.1%, Japan by 6.2%, and the U.S. economy is expected to decline by 2.8%

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