Precious metals incur more shine

The weak dollar helps prices go up substantially

Precious metal prices ended substantially higher on Monday, 23 November, 2009. Prices rose as the greenback registered a sharp drop.

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 $1,164.7, higher by $17.9 (1.6%) an ounce on the New York Mercantile Exchange. Earlier, it rose to a high of $1,174. This was an all time high for the yellow metal. Year to date, gold prices are higher by 32%.

Gold ended October 2009 higher by 3.8%. 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 17 cents (0.9%) at $18.61 an ounce.

In the currency market on Monday, U.S. dollar dropped markedly following comments from Chicago Fed President Evans that he thinks near zero interest rates will remain well into 2010. In a separate report, St. Louis Fed President Bullard shared an interest in keeping the Fed's Mortgage-Backed Securities program active beyond the first quarter of 2010. The Dollar Index dropped by nearly 0.7%.

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 162 (0.93%) at Rs 17,551 per 10 grams. Prices rose to a high of Rs 17,624 per 10 grams and fell to a low of Rs 17,408 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 93 (0.32%) higher at Rs 28,609/Kg. Prices opened at Rs 28,580/kg and rose to a high of Rs 28,860/Kg during the day's trading. .