Bullion metals end mixed

Weak dollar plays its part in moving bullion metal prices



Bullion metal prices ended mixed on Wednesday, 14 July 2010 at Comex. Gold prices ended marginally lower while silver prices gained following a weak dollar. Bullion metal prices remained volatile and fluctuated throughout the day.

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. Recently, the embattled euro has played stronger role in moving prices rather than dollar fluctuation. Bullion metals have registered increase in prices despite strong dollar in recent times and vice versa.

On Wednesday, gold for August delivery ended at $1,207 an ounce, lower by $6.5 (0.5%) an ounce on the New York Mercantile Exchange. Earlier in the day, prices made quite a few attempts to register gains. Last week, gold ended higher by 0.2%.

Gold ended the month of June higher by 2.5%. For the second quarter, gold ended up by 12%, its seventh consecutive quarterly gain. For the first quarter of this year, gold rose by 1.7%. On a year to date basis, gold is higher by 11.1%.

On Wednesday, September Comex silver futures ended higher by 18 cents (0.7%) at $18.29 an ounce. Last week, silver ended higher by 5.6%. For the second quarter, silver ended higher by 3.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 5.2%.

On Wednesday, US stocks ended almost flat despite a better than expected earning report from Intel. The same was offset by drop in retail sales in June. The Commerce Department in US reported today that sales at US retailers dropped 0.5% in June.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies fell 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 August delivery closed lower by Rs 65 (1.3%) at Rs 18,383 per ten grams. Prices rose to a high of Rs 18,505 per 10 grams and fell to a low of Rs 18,335 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 91 (1.82%) higher at Rs 29,135/Kg. Prices opened at Rs 29,031/kg and rose to a high of Rs 29,299/Kg during the day's trading.