Precious metals end mixed

Yellow metal ends marginally lower but silver shines

Bullion metal prices ended mixed on Tuesday, 15 December, 2009. Gold prices registered marginal losses but silver went up. Speculation in the market that the Federal Reserve might withdraw back some of the liquidity that t has pumped in recent times gave a boost to 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 Tuesday, gold for December delivery ended at $1,123 an ounce, lower by $0.80 (0.07%) an ounce on the New York Mercantile Exchange. Last week, gold shed 4.2%.

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 27.5%.

On Tuesday, December Comex silver futures ended higher by 11 cents (0.6%) at $17.45 an ounce. Last week, silver ended lower by b7.6%.

In the currency market on Tuesday, the dollar index, which weighs the strength of dollar against a basket of six other currencies rose by almost 0.8%.

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

At the MCX, gold prices for February delivery closed higher by Rs 16 (0.09%) at Rs 17,041 per ten grams. Prices rose to a high of Rs 17,108 per 10 grams and fell to a low of Rs 16,885 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 95 (0.34%) higher at Rs 27,318/Kg. Prices opened at Rs 27,305/kg and rose to a high of Rs 27,398/Kg during the day's trading.