Bullion metals end mixed

Gold manages to add gains despite strong dollar

Precious metal prices ended mixed on Thursday, 18 March 2010. Gold prices rose marginally as the dollar went up following renewed concerns over Greece's fiscal problems. Silver prices slipped.

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 $1,127.5 an ounce, higher by $3.3 (0.3%) an ounce on the New York Mercantile Exchange. During intra day trading, gold rose to a high of $1,129.5. Last week, gold fell 2.4%. In FY 2010, gold touched a high of $1,154 in January.

On Thursday, May Comex silver futures ended lower by 9.7 cents (0.55%) at $17.42 an ounce. Last week, silver ended lower by almost 1.9%.

Doubts about the euro zone's aid plan for the debt-strapped Greek government resurfaced amid talk that Greece might resort to help from the International Monetary Fund.

In the currency market on Thursday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by 0.6%.

The latest FOMC policy statement that came out earlier during the week was little changed from previous directives. The Fed has left its target federal funds rate unchanged at a range of 0.00% to 0.25% and the Fed said that it continues to expect an exceptionally low level for an extended period.

On Capitol Hill, Federal Reserve Chairman Ben Bernanke testified on Wednesday about efforts to reform banking regulation, telling Congress the Fed's participation in the oversight of banks improves its ability to carry out its monetary goals.

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 81 (0.48%) at Rs 16,768 per ten grams. Prices rose to a high of Rs 16,780 per 10 grams and fell to a low of Rs 16,638 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 63 (0.23%) lower at Rs 27,106/Kg. Prices opened at Rs 27,158/kg and fell to a low of Rs 26,957/Kg during the day's trading.