Mixed end for precious metals again

Gold ends at highest level since December

Precious metal prices ended mixed with gold ending higher on Wednesday, 28 April 2010 at Comex. News that S&P downgraded Spain's credit rating took stocks sharply lower in late morning trade at Wall Street on Wednesday, 28 April 2010 and pushed yellow metal higher. The news comes just one day after they downgraded the ratings of both Portugal and Greece. The same strengthened the dollar vis a vis the euro once again. Silver prices dropped.

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 June delivery ended at $1,171.8 an ounce, higher by $9.6 (0.8%) an ounce on the New York Mercantile Exchange. This was the highest closing for gold since December. Last week, gold ended higher by 1.5%. For the month of March, gold slid 0.4%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 6.7%.

On Wednesday, May Comex silver futures ended lower by 7 cents (0.4%) at $18.1 an ounce. Last week, silver lost 2.9%. For the month of March, silver ended higher by 5%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.1%.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against basket of six other currencies fell by 0.4%. Spain's downgrade comes on top of months of worry over Portugal and Greece's fiscal position and concerns that other countries in the periphery of the euro zone might also be suffering from the same ailments.

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 June delivery closed higher by Rs 167 (0.98%) at Rs 17,104 per ten grams. Prices rose to a high of Rs 17,139 per 10 grams and fell to a low of Rs 16,938 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 48 (0.17%) higher at Rs 27,607/Kg. Prices opened at Rs 27,630/kg and rose to a high of Rs 27,769/Kg during the day's trading.