Yellow metal marks another new high

Gold touches new high of $1,094 an ounce

Precious metal prices ended substantially higher on Wednesday, 04 November, 2009. Yellow metal marked another record high. Prices shot up as Federal Reserve said that it will continue with its ongoing monetary policy and the same weakened the dollar.

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 Wednesday, gold for December delivery ended at $1,092.1, higher by $4.8 (0.44%) an ounce on the New York Mercantile Exchange. Earlier, it rose to a high of $1094. This was an all time high for the yellow metal. Year to date, gold prices are higher by 24%.

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 Wednesday, December Comex silver futures ended higher 22 cents (1.3%) at $17.405 an ounce.

Year to date, silver has climbed 60.8% this year. For 2008, silver had lost 24%.

The Institute for Supply Management reported on Wednesday, 04 November, 2009 that its nonmanufacturing index fell to 50.6% from 50.9% in September.

The report showed that business conditions improved in October across a narrower group of companies in the U.S. nonmanufacturing sectors. Readings above 50% indicate more firms said business is improving than said it's worsening.

In the currency market on Wednesday, the dollar index, which calculates the strength of the dollar against a basket of six other currencies fell by 0.5%.

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 lower by Rs 30 (0.18%) at Rs 16,588 per 10 grams. Prices rose to a high of Rs 16,677 per 10 grams and fell to a low of Rs 16,527 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 276 (1.02%) higher at Rs 26,990/Kg. Prices opened at Rs 27,0120/kg and rose to a high of Rs 27,994/Kg during the day's trading. .