Precious metals glitter after a long time

Prices inch up as the dollar slips

Bullion metal prices inched up on Monday, 14 December, 2009. Prices rose after quite some time as the dollar fell as news hit the wires that Abu Dhabi has committed to bail out Dubai out of its debt crisis.

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 $1,123.9 an ounce, higher by $3.9 (0.3%) 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 28.3%.

On Monday, December Comex silver futures ended higher by 25 cents (1.5%) at $17.34 an ounce. Last week, silver ended lower by b7.6%.

In the currency market on Monday, the dollar index, which weighs the strength of dollar against a basket of six other currencies fell by almost 0.3%.

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 61 (0.36%) at Rs 17,025 per ten grams. Prices rose to a high of Rs 17,116 per 10 grams and fell to a low of Rs 16,956 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 179 (0.7%) higher at Rs 27,223/Kg. Prices opened at Rs 27,118/kg and rose to a high of Rs 27,347/Kg during the day's trading.