Precious metals turn little

Prices drop due to the strong dollar

Precious metal prices fell on Wednesday, 26 August, 2009. Prices fell today due to the strong dollar.

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 Wednesday, gold for December delivery ended at $945.8, lower by $0.20 (0.02%) an ounce on the New York Mercantile Exchange. During intra day trading, it fell to a low of $941.2. Last week, gold ended higher by almost 0.6%. Year to date, gold prices are higher by 6.5%.

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%) since then.

On Wednesday, Comex silver futures for September delivery fell by 5.5 cents (0.4%) to $14.255 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 28% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar firmed up during the day. The dollar index which weighs the value of dollar against a basket of six other currencies rose by 0.7%.

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 68 (0.45%) at Rs 15,032 per 10 grams. Prices rose to a high of Rs 15,045 per 10 grams and fell to a low of Rs 14,977 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 47 (0.2%) higher at Rs 23,381/Kg. Prices opened at Rs 23,423/kg and rose to a high of Rs 23,546/Kg during the day's trading.