Bright day for precious metals

Gold registers weekly gains but silver slips

Precious metals ended higher on Friday, 07 May at Comex. Precious metals added gains at Comex even as US equities dropped despite a bright job report and other commodities like oil plunged as European sovereign debt concerns failed to abate.

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 Friday, gold for June delivery ended at $1,210.4 an ounce, higher by $13.1 (1.1%) an ounce on the New York Mercantile Exchange. It was a five-month high level for gold. It hovered around the $1,200 mark for the entire day and dropped earlier in the day. It is very close to touch its all time high level of $1,217 it witnessed last December. Gold for June delivery settled above $1,200 in early December, only to pull back to $1,172 area and dip as much as the $1,050 vicinity in early February.

For the week, gold ended higher by 2.5%. For the month of April, gold ended higher by 6%. 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 10.2%.

On Friday, July Comex silver futures ended higher by 94 cents (5.3%) at $18.45 an ounce. For the week, silver ended lower by 0.9%. For the month of April, silver ended higher by 4.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.3%.

The best monthly jobs report in four years couldn't keep sellers from sending US stocks to their fourth straight loss, which contributed to the stock market's worst weekly performance in one year.

A bailout package worth some $146 billion for Greece was announced last weekend, but it was not enough to restore investors' confidence about the euro-zone countries and the euro and investors again sought gold as a hedge against currency fears.

Among economic reports for the day, The Labor Department in US reported on Friday, 07 May 2010 that U.S. added 290,000 jobs in April, the biggest increase since March 2006, with broad gains throughout the economy. Despite this, the unemployment rate rose.

The report showed that excluding temporary Census workers, nonfarm jobs rose a seasonally adjusted 224,000. The unemployment rate ticked up to 9.9% from 9.7% owing to a big increase in the labor force. Some 805,000 people entered the labor force in April, one of the largest increases on record. About 550,000 of them found work; 255,000 did not.

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.