Precious metals register mixed end

Gold shines but silver drops little

Precious metal prices ended mixed on Thursday, 27 August, 2009. Gold prices rose today as the dollar slipped. But silver prices fell marginally.

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 Thursday, gold for December delivery ended at $947.4, higher by $1.6 (0.2%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by almost 0.6%. Year to date, gold prices are higher by 6.8%.

Gold ended July, 2009 higher by 2.8%. Before this, for the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8.5%) since then.

On Thursday, Comex silver futures for September delivery fell by 3 cents (0.2%) to $14.22 an ounce. Last week, silver ended lower by 3.9%.

Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 27.8% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar index which weighs the value of dollar against a basket of six other currencies fell by 0.2%.

The preliminary second quarter GDP reading showed that the U.S. economy contracted at an annualized rate of 1%, unrevised from the advance reading and better than expected. Consumer spending was revised modestly higher to show a 1.0% decline, which was also a bit better than expected.

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

At the MCX, gold prices for October delivery closed higher by Rs 6 (0.03%) at Rs 15,027 per 10 grams. Prices rose to a high of Rs 15,064 per 10 grams and fell to a low of Rs 14,980 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 94 (0.4%) lower at Rs 23,296/Kg. Prices opened at Rs 23,352/kg and fell to a low of Rs 23,124/Kg during the day's trading.