Bullion metals end week on a dull note

Prices register marginal weekly gains

Precious metal prices ended the week on Friday, 15 January 2010 on a dull note. Prices fell as the dollar turned strong as earning and economic reports failed to cheer investors at Wall Street.

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 Friday, gold for February delivery ended at $1,130.5 an ounce, lower by $12.5 (1%) an ounce on the New York Mercantile Exchange. For the week, it ended higher by 0.4%. Year to date in FY 2010, gold has risen by almost 3.3%.

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 Friday, March Comex silver futures ended lower by 22 cents (1.2%) at $18.43 an ounce. For the week, silver ended higher by 0.5%. Year to date in FY 2010, silver has risen by almost 10.1%.

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 Friday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.7%.

The Federal Reserve in US reported on Friday, 15 January, 2010 that output of the nation's factories, mines and utilities rose a seasonally adjusted 0.6% in December, 2009, the sixth increase in a row.

Separately, the Commerce Department in US reported on Friday, 15 January 2010 that its consumer price index increased 0.1% in December 2009, down from a 0.4% advance in November. This is the lowest rate since July and is slightly below expectations of a 0.2% rise.

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.