Bullion metals add more glaze

Strong dollar limits gains

Precious metal prices ended higher on Tuesday, 19 January 2010 on anticipation of higher investment demand. However, strong dollar limited precious metal's gains. Comex trading was shut yesterday due to a holiday.

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 February delivery ended at $1,140 an ounce, higher by $9.5 (0.8%) an ounce on the New York Mercantile Exchange. Last week, it ended higher by 0.4%. Year to date in FY 2010, gold has risen by almost 4.1%.

Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end.

On Tuesday, March Comex silver futures ended higher by 37.3 cents (2%) at $18.8 an ounce. Last week, silver ended higher by 0.5%. Year to date in FY 2010, silver has risen by almost 12.1%.

Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level.

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

Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.

At the MCX, gold prices for February delivery closed higher by Rs 99 (0.6%) at Rs 16,933 per ten grams. Prices rose to a high of Rs 16,944 per 10 grams and fell to a low of Rs 16,841 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 217 (0.76%) higher at Rs 28,665/Kg. Prices opened at Rs 28,485/kg and rose to a high of Rs 28,680/Kg during the day's trading.