Bullion metals drop

Prices end marginally lower as dollar climbs up

Precious metal prices ended marginally lower on Monday, 01 March, 2010. Prices fell at the end as the dollar climbed up against the euro.

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 April delivery ended at $1,118.3 an ounce, lower by $0.60 (0.6%) an ounce on the New York Mercantile Exchange. During intra day trading, it rose by 0.4%.

On Monday, March Comex silver futures ended lower by 5.2 cents (0.3%) at $16.469 an ounce.

In the currency market on Monday, the dollar strengthened against the euro. The dollar climbed up almost 1.3% against the euro. The dollar index, which gained more than 1% ultimately ended the day with a 0.6% gain.

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 7 (0.04%) at Rs 16,796 per ten grams. Prices rose to a high of Rs 16,849 per 10 grams and fell to a low of Rs 16,640 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 69 (0.26%) lower at Rs 26,045/Kg. Prices opened at Rs 26,165/kg and fell to a low of Rs 25,970/Kg during the day's trading.