Mixed end for precious metals

Gold adds to its gains but silver sheds gains in May

Yellow metal prices managed to eke out marginal gains on Friday, 28 May 2010 at Comex. Precious metals put in a lackluster session on Friday, which marked the final trading day of the month since markets will be closed on Monday in observance of Memorial Day. But silver prices slipped.

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 August delivery ended at $1,215 an ounce, higher by $0.60 (0.1%) an ounce on the New York Mercantile Exchange. During intra day trading, gold fell to a low of $1,203.8. Gold for June delivery had 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 3.3%. Gold ended May higher by 3%. 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 10.7%.

On Friday, July Comex silver futures ended lower by 5 cents (0.3%) at $18.42 an ounce. For the week, silver ended higher by 4.3%. For May, silver shed 1.1%. 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%.

In the currency market on Friday, the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.4%.

Among economic reports for the day, The Reuters/University of Michigan consumer sentiment index reported that U.S. consumer sentiment rose in May from the prior month. The report stated that the UMich index rose to 73.6 in late May from 72.2 in April. This May's reading is up from 68.7 in May 2009. However, it is below the long-term average of about 87. The report detailed that index of consumer expectations rose to 68.8 in May from 66.5 in April, while the current conditions index remained at 81.

Separately, the Commerce Department reported that consumer spending was weaker than expected in April but rising personal incomes hinted that the economy could actually be on firmer ground. Consumer spending was flat in April after six straight monthly increases. Total personal income rose by a seasonally adjusted 0.4% in April to an annual rate of $12.27 trillion. Incomes were in line with expectations.

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.