Precious metals mark new highs

Gold touches new high of $1,084 an ounce

Precious metal prices ended substantially higher on Tuesday, 03 November, 2009. Prices shot up as Indian Central Bank disclosed its ides to purchase 200 metric tons of bullion.

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 $1,084.3, higher by $30.9 (2.9%) an ounce on the New York Mercantile Exchange. Earlier, it rose to a high of $1085.2. This was an all time high for the yellow metal. Previous to this, in October, gold had registered record highs quite a few times reaching an all time high of $1071. Year to date, gold prices are higher by 23%.

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 Tuesday, December Comex silver futures ended higher 74 cents (4.5%) at $17.18 an ounce.

Year to date, silver has climbed 59.5% this year. For 2008, silver had lost 24%.

The Commerce Department in US reported on Tuesday, that factory orders rose 0.9% in September, the fifth monthly increase in six months and more than market expectations.

In the currency market on Tuesday, the dollar index, which calculates the strength of the dollar against a basket of six other currencies reversed its course after dropping earlier during the day. Finally, it rose by 0.1%.

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 501 (3.1%) at Rs 16,618 per 10 grams. Prices rose to a high of Rs 16,639 per 10 grams and fell to a low of Rs 16,129 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 900 (3.4%) higher at Rs 27,018/Kg. Prices opened at Rs 26,170/kg and rose to a high of Rs 27,139/Kg during the day's trading.