Precious metals turn little pale

Prices drop due to the strong dollar

Precious metal prices ended lower on Thursday, 22 October, 2009. Prices fell today as the dollar rose today from fourteen month low.

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 $1,058.6, lower by $5.9 (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 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 Thursday, December Comex silver futures ended lower by 28 cents (1.6%) at $17.545 an ounce.

Silver ended 11.8% higher for September, 2009. Year to date, silver has climbed 58.9% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar index, which calculates the strength of the dollar against a basket of six other currencies rose by almost 0.2%. Earlier during the day, it rose by almost 0.6%.

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 63 (0.4%) at Rs 16,012 per 10 grams. Prices rose to a high of Rs 16,050 per 10 grams and fell to a low of Rs 15,951 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 109 (0.4%) lower at Rs 27,231/Kg. Prices opened at Rs 27,250/kg and fell to a low of Rs 27,068/Kg during the day's trading.