Precious metals end mixed

Gold shines but silver turns pale

Precious metal prices ended mixed on Tuesday, 27 April 2010 at Comex. Downgrade of Greek and Portuguese debt by Standard & Poor's led to ignition of euro zone problems once again. Gold ended higher but silver dropped. However, a strong dollar restricted yellow metals' 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 Tuesday, gold for June delivery ended at $1,162.2 an ounce, higher by $8.20 (0.7%) an ounce on the New York Mercantile Exchange. Earlier during the day, it rose to a high of $1,165.3. 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 5.9%.

On Tuesday, May Comex silver futures ended lower by 22 cents (1.2%) at $18.11 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 6.5%.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by 0.7%. Portugal's and Greece's ratings downgrade comes on top of months of worry over 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 165 (0.98%) at Rs 16,937 per ten grams. Prices rose to a high of Rs 16,950 per 10 grams and fell to a low of Rs 16,726 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 171 (0.61%) lower at Rs 27,559/Kg. Prices opened at Rs 27,717/kg and fell to a low of Rs 27,504/Kg during the day's trading.