Bullion metal prices stay steady for the week

Gold registers worst monthly drop in seven months

Bullion metal prices ended higher on Friday, 30 July 2010 at Comex. A weaker than expected second quarter GDP report increased the appeal of precious metals as an alternate investment.

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 Friday, gold for December delivery ended at $1,183.9 an ounce, higher by $12.7 (1.1%) on the New York Mercantile Exchange. For the week, gold ended lower by a mere 0.3%.

Gold ended the month of July lower by 5%. It was the worst monthly loss for gold since December 2009. Before this, it ended 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 8.9%.

On Friday, September Comex silver futures ended higher by 39 cents (2.2%) at $18 an ounce. For the week, silver ended almost unchanged. For the month of July 2010, silver shed 3.7%. 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 6.2%.

Data showed that U.S. economy expanded at an annualized rate of 2.4% in the second quarter, but that was a bit below the 2.5% that had been widely expected and down from the first quarter's upwardly revised 3.7% growth rate. It was also well below the average 4.4% increase over the past six months.

Additionally, personal consumption for the second quarter increased 1.6% after a 1.9% increase in the first quarter.

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.