Precious metals retreat from record highs

Prices slip as dollar gains ground

Precious metal prices went back from their record highs on Thursday, 15 October, 2009 as the dollar managed to gain some ground as the Dow hovered around the 10,000 mark.

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 Thursday, gold for December delivery ended at $1,049.8, lower by $14.10 (1.3%) an ounce on the New York Mercantile Exchange. In the past few sessions gold had registered record highs quite a few times. It reached an all time high of $1064 earlier this week. Last week, gold ended higher by 4.3%. Year to date, gold prices are higher by 18.5%.

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 Thursday, December Comex silver futures ended lower by 49 cents (2.7%) at $17.41 an ounce. Last week, silver ended higher by 8.9%.

Silver ended 11.8% higher for September, 2009. Year to date, silver has climbed 55.8% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar rose against most of its rivals as US stocks pared some of their yesterday's gains. The dollar index, which measures the strength of the dollar against a basket of six other currencies, rose by 0.4%.

In the crude market today, crude oil surpassed $75 after a long time and reached the highest level in a year's time.

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 lower by Rs 192 (1.2%) at Rs 15,729 per 10 grams. Prices rose to a high of Rs 15,905 per 10 grams and fell to a low of Rs 15,717 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 632 (2.3%) lower at Rs 26,743/Kg. Prices opened at Rs 27,362/kg and fell to a low of Rs 26,710/Kg during the day's trading.