Bullion metals end mixed

Gold drops but silver rises as housing data checks in better than expected

Bullion metal prices ended mixed on Monday, 26 July 2010 at Comex. Gold prices dropped but silver rose after the housing report at Wall Street checked in better than expected. Housing data reduced gold's investment appeal but silver rose due to industrial demand.



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 Monday, gold for August delivery ended at $1,183.1 an ounce, lower by $4.7 (0.4%) on the New York Mercantile Exchange. Prices closed below the $1,200 mark for seventh consecutive session. Last week, gold ended lower by a mere 0.1%.

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 9%.

On Monday, September Comex silver futures ended higher by 1 cents (0.1%) at $18.2 an ounce. Prices rose due to the industrial appeal of the metal. Last week, silver ended lower by 0.6%. 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 7.3%.

The Commerce Department in US reported on Monday, 26 July 2010 that U.S. sales of new homes rose 23.6% in June to a seasonally adjusted annual rate of 330,000. The figure was better than expected.

The report detailed that in June, the number of unsold new homes on the market slipped 1.4% to 210,000, the fewest since September 1968. That represented a 7.6-month supply at the June sales pace, less than the 9.6-month supply in May. The median sales price of $213,400 in June was down 0.6% compared with a year earlier.

The report also showed that new-home sales for May plummeted a revised 36.7% to a record low 267,000 level after a federal subsidy for home buyers expired. This is a steeper drop than the 32.7% fall and 300,000 in annualized sales that the government initially estimated.

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 113 (0.61%) at Rs 18,144 per ten grams. Prices rose to a high of Rs 18,274 per 10 grams and fell to a low of Rs 18,113 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 26 (0.09%) higher at Rs 29,169/Kg. Prices opened at Rs 29,160/kg and rose to a high of Rs 29,225/Kg during the day's trading.