Precious metals turn little pale

Prices trade within narrow boundary

Precious metal prices ended little lower on Wednesday, 09 September, 2009. Prices fell despite the weak dollar. Some extent of profit taking due to gold's recent rally was mainly the reason for precious metals' drop today. The December contract of gold had rallied almost 9% in past four sessions.

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 September delivery ended at $995.3, lower by $2.6 (0.3%) an ounce on the New York Mercantile Exchange. During intra day trading, trading remained within a narrow boundary. Last week, gold ended higher by 4%. Year to date, gold prices are higher by 14.1%.

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 (2.5%) since then.

On Wednesday, Comex silver futures for December delivery fell by 4 cents (0.2%) to $16.47 an ounce. Last week, silver ended higher by 9.9%.

Silver ended 7.1% higher for August, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 43% this year. For 2008, silver had lost 24%.

In the currency market today, the U.S. dollar fell to a new yearly low. The dollar index, which measures the strength of dollar against a basket of other currencies, fell by 0.5% but ultimately settled lower by 0.3%.

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 72 (0.45%) at Rs 15,649 per 10 grams. Prices rose to a high of Rs 15,814 per 10 grams and fell to a low of Rs 15,636 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 78 (0.3%) lower at Rs 26,394/Kg. Prices opened at Rs 26,550/kg and fell to a low of Rs 26,215/Kg during the day's trading.