Precious metals end mixed

Gold rises for third consecutive day

Yellow metal prices rose higher for third straight day on Tuesday, 20 October, 2009. Traders anticipated that the dollar will slump further and also interest rates will stay at minimum levels in the next few months in US. But silver dropped for the day

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 December delivery ended at $1,058.6, higher by $0.50 (0.05%) an ounce on the New York Mercantile Exchange. In the last week gold had registered record highs quite a few times. It reached an all time high of $1071 earlier last week. Last week, gold ended higher by 0.3%. Year to date, gold prices are higher by 20%.

Gold ended September, 2009 higher by 5.9%. For the third quarter it ended higher by 8.7%. 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 Tuesday, December Comex silver futures ended lower by 6.7 cents (0.4%) at $17.558 an ounce.

Silver ended 11.8% higher for September, 2009. Year to date, silver has climbed 59% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar came under further pressure after the Federal Reserve Bank of New York clarified yesterday that it has been testing reverse-repurchase agreements for technical reasons, and that the tests shouldn't be seen as hints of a tighter monetary policy, which might ordinarily be bullish for the U.S. currency. The dollar index, has dropped 7% this year. The dollar index, which measures the strength of dollar against a basket of six other currencies, fell to a fourteen month low this year.

In the crude market today, crude oil surpassed $79 once again and closed marginally lower.

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

At the MCX, gold prices for December delivery closed higher by Rs 4 (0.02%) at Rs 15,853 per 10 grams. Prices rose to a high of Rs 15,870 per 10 grams and fell to a low of Rs 15,777 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 121 (0.44%) higher at Rs 27,062/Kg. Prices opened at Rs 26,983/kg and rose to a high of Rs 27,100/Kg during the day's trading.