Precious metals end higher for second straight day

Prices rise as dollar continues to stay weak

Bullion metal prices went up on Thursday, 24 December 2009. Prices rose as the dollar fell following couple of economic data. Nevertheless, yellow metal prices witnessed losses for the week. However, silver gained for the week.

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 February delivery ended at $1,104.8 an ounce, higher by $10.8 (1%) an ounce on the New York Mercantile Exchange. Earlier during the week, gold had dropped below the $1,100 level for first time in more than one and half months. For the week, gold shed 0.6%. The metal fell for four straight weeks.

Gold ended November 2009 higher by 13%. Before that, for the third quarter it ended higher by 8.7%. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year. On a year to date basis, gold price is higher by 26.1%.

On Thursday, December Comex silver futures ended higher by 25 cents (1.4%) at $17.44 an ounce. For the week, silver registered 0.7% gain. The metal has gained 53.6% this year until date.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.1%. The dollar was weak against most of its counterparts following better than expected economic data.

The Labor Department in US reported on Thursday, 24 December, 2009 that the first-time claims for state unemployment benefits fell a seasonally adjusted 28,000 to 452,000 in the week ended 19 December, 2009, hitting the lowest level since September 2008. The figure was lower than expectation.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

Market was closed on Friday, 25 December, 2009 due to Christmas Day holiday.