Precious metals stay bright

Prices rise for third straight day

Precious metals ended higher for third straight day on Wednesday, 26 May 2010 at Comex. Prices rose despite a strong dollar. Prices rose today as global stocks markets recovered partially and as traders thought that last week's selling of commodities leading to lower prices was overdone.

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 Wednesday, gold for June delivery ended at $1,213.4 an ounce, higher by $15.4 (1.3%) an ounce on the New York Mercantile Exchange. 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.

Last week, gold ended lower by 4.2%. This month, till date gold is trading 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 10.5%.

On Wednesday, July Comex silver futures ended higher by 53 cents (2.9%) at $18.3 an ounce. Last week, silver ended lower by 8.1%. 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 8.6%.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.3%.

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 31 (0.17%) at Rs 18,542 per ten grams. Prices rose to a high of Rs 18,648 per 10 grams and fell to a low of Rs 18,526 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 368 (1.3%) higher at Rs 29,280/Kg. Prices opened at Rs 28,949/kg and rose to a high of Rs 29,493/Kg during the day's trading.