Precious metals shine again

Prices rise as dollar slips

Precious metal prices rose higher on Monday, 19 October, 2009 due to the dropping dollar. Prices rose as traders anticipated that interest rates will stay at minimum levels in the next few months in US.

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 Monday, gold for December delivery ended at $1,058.1, higher by $6.6 (0.6%) 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 this week. Last week, gold ended higher by 0.3%. Year to date, gold prices are higher by 19%.

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 Monday, December Comex silver futures ended higher by 21 cents (1.2%) at $17.63 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 Monday, the dollar came under further pressure after the Federal Reserve Bank of New York clarified 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, which measures the strength of the dollar against a basket of six other currencies, fell by 0.3%.

In the crude market today, crude oil surpassed $79 and created a record high price for this year.

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