Bullion metals end higher

Gold rises for first time in four days

Precious metal prices ended higher for first time in four days on Thursday, 25 February 2010. Yellow metal prices rose today after Greece's financial problems resurfaced once again.

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 April delivery ended at $1,108.5 an ounce, higher by $11.3 (1%) an ounce on the New York Mercantile Exchange. During intra day trading, it fell to a low of $1088.5. Last week, gold gained 3.1%. For January 2010, gold lost 1.2%. Year to date, gold is higher by 1.3%.

On Thursday, March Comex silver futures ended higher by 17 cents (1%) at $15.89 an ounce. Last week, silver ended higher by 4.1%. In January 2010, silver shed 3.9%. Year to date in FY 2010, silver has dropped by almost 2.6%.

In the currency market on Thursday, the dollar strengthened against the euro. Currency traders bid the dollar moderately higher in the early going amid reports that Moody's indicated ratings changes for Greece hinge on fiscal reform follow through. The dollar has continued to oscillate in recent action, but is presently in positive territory with a 0.2% gain.

Among the major economic data expected for the day, the Labor Department said that weekly jobless claims unexpectedly surged last week by 22,000 to 496,000, their highest level in more than three months. Market had expected initial claims to decrease by 13,000. The four-week average of claims, viewed as a more dependable barometer of the job market than volatile week-to-week readings, shook investors. The four-week average rose by 6,000 to 473,750, up from the previous week's revised average 467,750.

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.

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. 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.

At the MCX, gold prices for April delivery closed higher by Rs 206 (1.2%) at Rs 16,694 per ten grams. Prices rose to a high of Rs 16,718 per 10 grams and fell to a low of Rs 16,422 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 306 (1.23%) higher at Rs 25,150/Kg. Prices opened at Rs 24,850/kg and rose to a high of Rs 25,216/Kg during the day's trading.