Bullion metals turn pale for second straight day

Prices end lower as dollar stays strong for most part of the day

Precious metal prices ended lower for second straight day on Monday, 22 March 2010. Prices ended little lower as the dollar stayed strong for most part of the day. At the end, nevertheless, the dollar coughed up its gains.

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 $1,099.5 an ounce, lower by $8.1 (0.7%) an ounce on the New York Mercantile Exchange. This comes after last Friday's loss of 2%. Last week, gold gained 0.5%. In FY 2010, gold touched a high of $1,154 in January.

On Monday, May Comex silver futures ended lower by 10 cents (0.5%) at $16.93 an ounce. Last week, silver ended almost unchanged against last Friday's closing of $17.04.

In the currency market on Monday, the dollar index, which measures the strength of the dollar against basket of six other currencies fell by 0.2% at the end of the day after staying strong earlier.

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 90 (0.54%) at Rs 16,416 per ten grams. Prices rose to a high of Rs 16,515 per 10 grams and fell to a low of Rs 16,345 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 51 (0.19%) lower at Rs 26,538/Kg. Prices opened at Rs 26,540/kg and fell to a low of Rs 26,180/Kg during the day's trading.