Precious metals end higher

Prices go up as dollar slips

Precious metal prices ended higher on Wednesday, 14 April 2010. Prices rose as dollar fell as traders anticipated strong earning reports from Intel and JP Morgan Chase.

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 $1,159.6 an ounce, higher by $6.2 (0.5%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 3.2%. 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 5.8%.

On Wednesday, May Comex silver futures ended higher by 23 cents (1.2%) at $18.47 an ounce. Last week, silver gained 2.6%. 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 8.2%.

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%. The dollar index gained about 0.7% in March and rallied 4% during the first quarter. The dollar index has gained 4.1% this year till date. The U.S. currency gave ground, as investors were eager to embrace risk again, helped by upbeat earnings reports from Intel and J.P. Morgan Chase that boosted sentiment on Wall Street.

Among economic reports for the day, the Commerce Department in US reported on Wednesday, 14 April 2010 that U.S. retail sales rose a better-than-expected 1.6% in March, spurred by fresh demand for autos, building materials and new spring clothes. Sales totaled $363.2 billion - the fifth gain in six months. Excluding autos and trucks, sales climbed 0.6% to $300.5 billion.

Also, the Labor Department in US reported on Wednesday, 14 April 2010 that U.S. consumer prices rose 0.1% on a seasonally adjusted basis due mainly to increased costs for fresh fruits and vegetables. The government's core consumer price index, measuring the rate of retail-level inflation after excluding food and energy, was unchanged in March.

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 lower by Rs 5 (0.02%) at Rs 16,796 per ten grams. Prices rose to a high of Rs 16,877 per 10 grams and fell to a low of Rs 16,755 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 142 (0.51%) higher at Rs 27,831/Kg. Prices opened at Rs 27,712/kg and rose to a high of Rs 27,948/Kg during the day's trading.