Precious metals rise for first time in four days

Gold and silver shine on back of lower dollar and higher crude

Precious metal prices rose for the first time in four days on Tuesday, 22 September, 2009. Prices rose today as the dollar weakened. The Federal Reserve started its two day meet on monetary policy today. Precious metal prices also followed higher crude prices.

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 Tuesday, gold for September delivery ended at $1014.2, higher by $10.5 (1%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 0.4%. Year to date, gold prices are higher by 16%.

Gold ended August, 2009 higher by 0.2%. 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 (1.8%) since then.

On Tuesday, Comex silver futures for December delivery rose 23.5 cents (1.4%) to $17.115 an ounce. Last week, silver ended higher by 2.2%.

Silver ended 7.1% higher for August, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 48.8% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.7%.

Federal Reserve started its two day meet on monetary policy today. The FOMC will release tomorrow a statement on monetary policy that may clarify how the central bank plans to unwind its quantitative easing programs.

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 40 (0.25%) at Rs 15,816 per 10 grams. Prices rose to a high of Rs 15,888 per 10 grams and fell to a low of Rs 15,768 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 117 (0.43%) higher at Rs 27,210/Kg. Prices opened at Rs 27,193/kg and rose to a high of Rs 27,497/Kg during the day's trading.