Bullion metals shed more glaze

Prices pare earlier gains

Precious metal prices ended little lower on Wednesday, 10 March, 2010. Prices pared earlier gains. Prices increased earlier during the day following China's economic data.

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 Wednesday, gold for April delivery ended at $1,122.3 an ounce, lower by $1.7 (0.2%) an ounce on the New York Mercantile Exchange. It rose to a high of $1,128.3 earlier during the day. Last week, gold gained 1.4%. In FY 2010, gold touched a high of $1,154 in January.

On Wednesday, May Comex silver futures ended lower by 5 cents (0.3%) at $17.29 an ounce. Last week, silver ended higher by almost 8%.

Gold and other metals advanced earlier after a report that showed China's trade surplus narrowed further in February to $7.6 billion from $14.2 billion in January due to soaring imports, reflecting growing domestic consumption.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by more than 0.3%.

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 lower by Rs 20 (1%) at Rs 16,707 per ten grams. Prices rose to a high of Rs 16,783 per 10 grams and fell to a low of Rs 16,561 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 40 (0.2%) lower at Rs 26,993/Kg. Prices opened at Rs 26,832/kg and fell to a low of Rs 27,020/Kg during the day's trading.