Precious metals add more glitter

Prices rise on strong demand hopes

Precious metal prices ended higher on Wednesday, 21 April 2010 at Comex. Better than expected earning reports in most cases pointed towards higher demand for metals in coming months.

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 $1,148.8 an ounce, higher by $9.6 (0.8%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 2.5%. 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 4.8%.

On Wednesday, May Comex silver futures ended higher by 25 cents (1.4%) at $18.11 an ounce. Last week, silver lost 3.7%. 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 5.9%.

Among earning reports at Wall Street, Boeing, McDonald's and United Technologies - all bested earnings expectations for the latest quarter. Fellow Dow component AT&T also reported an upside earnings surprise. Apple reported an upside earnings surprise after the prior session's close.

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 101 (0.6%) at Rs 16,728 per ten grams. Prices rose to a high of Rs 16,759 per 10 grams and fell to a low of Rs 16,621 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 317 (1.2%) higher at Rs 27,531/Kg. Prices opened at Rs 27,230/kg and rose to a high of Rs 27,560/Kg during the day's trading.