Yellow metal ends marginally lower

Mixed end for precious metals as silver manages to climb up

Yellow metal prices ended lower on Monday, 19 April 2010. Though prices recovered from intra day lows, negative news regarding Goldman Sachs continued to weigh on commodities during the whole day. The strong dollar added further woes. But silver prices managed to end marginally higher.

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 Monday, gold for June delivery ended at $1,135.8 an ounce, lower by $1.1 (0.1%) an ounce on the New York Mercantile Exchange. During intra day trading, gold fell to a low of $1,124.3 and rose to a high of $1,138.5. 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 3.7%.

On Monday, May Comex silver futures ended higher by 6 cents (0.3%) at $17.73 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 4.3%.

Wall Street was stunned on Friday after news hit the wires that the U.S. Securities and Exchange Commission has filed a civil suit accusing Goldman Sachs and one of its vice presidents of defrauding investors in connection with a mortgage derivative. As per reports, a key focus of these worries may be Paulson & Co., which is enmeshed in a SEC lawsuit against Goldman Sachs but hasn't been charged. The hedge fund giant is one of the world's biggest investors in gold. If Paulson investors try to redeem from the firm's hedge funds, the firm might be forced to unwind some of its gold positions, pressuring prices.

In the currency market on Monday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by 0.13%.

Among economic reports for the day, The Conference Board on Monday said the slow economic recovery should continue over the next few months, which also helped several commodities pare some of its losses. The index of leading economic indicators rose 1.4% in March, marking 12 consecutive gains, following an upwardly revised increase of 0.4% in February.

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 4 (0.02%) at Rs 16,613 per ten grams. Prices rose to a high of Rs 16,640 per 10 grams and fell to a low of Rs 16,471 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 67 (0.24%) higher at Rs 27,112/Kg. Prices opened at Rs 27,034/kg and rose to a high of Rs 27,146/Kg during the day's trading.