Precious metals shed some glaze

Prices turn pale in tandem with lower crude prices

Precious metal prices ended lower on Tuesday, 13 April 2010. Prices fell as traders mulled over the fact that precious metals' recent rally was overdone and hence many traders made their exit out of commodities. Prices ended lower in tandem with slipping crude prices.

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 $1,153.4 an ounce, lower by $8.8 (0.8%) an ounce on the New York Mercantile Exchange. During intra day trading, gold reached a low of $1,145.4. The yellow metal had hit fresh four-month high level yesterday. 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 5.3%.

On Tuesday, May Comex silver futures ended lower by 17 cents (0.9%) at $18.24 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 7%.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against basket of six other currencies remained relatively steady. The dollar index gained about 0.7% in March and rallied 4% during the first quarter. The dollar index has gained 4.5% this year till date.

In the crude market on Tuesday, oil prices pared losses to settle at $84.01 per barrel, down 0.4%. Oil prices had been down some 2% at their session low.

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 105 (0.62%) at Rs 16,801 per ten grams. Prices rose to a high of Rs 16,887 per 10 grams and fell to a low of Rs 16,725 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 158 (0.56%) lower at Rs 27,689/Kg. Prices opened at Rs 27,805/kg and fell to a low of Rs 27,402/Kg during the day's trading.