Precious metals rise for third straight day

Gold and silver prices gain as dollar plunges

Precious metal prices rose for third straight time on Monday, 03 August, 2009. Prices rose as the dollar weakened today and also as stocks across the world rallied overnight on hopes of quicker than expected global economic recovery.

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, gold for August delivery ended at $956.6, higher by $2.9 (0.3%) an ounce on the New York Mercantile Exchange. It rose as high as $964 earlier. Last week, gold ended almost unchanged. Year to date, gold prices are higher by 7.8%.

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 (9.2%) since then.

On Monday, Comex silver futures for September delivery gained 31.2 cents (2.2%) at $14.252 an ounce. Last week, silver ended higher by 0.5%.

Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 27.2% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the dollar index, a six-currency gauge of the greenback's value, fell by almost 1%.

As per latest report, China's manufacturing purchasing managers index remained in expansionary territory for the fourth consecutive month in July, rising to 52.8, up from 51.8 in June.

At Wall Street on Monday, The Institute for Supply Management reported on Monday, 03 August, 2009 that its index rose to 48.9% in July above the 46.2% expected. It was also higher than the 44.8% in June. It's the highest reading since last August. Readings below 50% in the ISM diffusion index indicate that more firms are contracting than growing. The ISM tracks the breadth of growth across firms, asking purchasing managers if business is better or worse this month than last.

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 lower by Rs 52 (0.35%) at Rs 14,769 per 10 grams. Prices rose to a high of Rs 14,888 per 10 grams and fell to a low of Rs 14,751 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 286 (1.3%) higher at Rs 22,758/Kg. Prices opened at Rs 22,516/kg and rose to a high of Rs 23,020/Kg during the day's trading.