Yellow metal makes another new record

Rising oil and dropping dollar continue to boost prices

Precious metal prices higher on Tuesday, 13 October, 2009 and yellow metal marked another new record. Prices rose on Tuesday following rising crude price and depressed dollar which increased the appeal of precious metals as a hedge against inflation.

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 $1,065, higher by $7.5 (0.7%) an ounce on the New York Mercantile Exchange. During intra day trading, gold price rose to a high of $1,068.4. For the week, gold ended higher by 4.3% last week. Year to date, gold prices are higher by 19.8%.

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, Comex silver futures ended marginally higher by 2 cents at $17.84 an ounce. Last week, silver ended higher by 8.9%.

Silver ended 11.8% higher for September, 2009. Year to date, silver has climbed 58.2% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar fell against most of its rivals. The euro climbed up substantially today. The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell to fourteen month low figure.

In the crude market today, crude oil touched almost $75 after a long 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 higher by Rs 113 (0.7%) at Rs 16,036 per 10 grams. Prices rose to a high of Rs 16,048 per 10 grams and fell to a low of Rs 15,890 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 55 (0.2%) higher at Rs 27,498/Kg. Prices opened at Rs 27,431/kg and rose to a high of Rs 27,680/Kg during the day's trading