Bullion metals end mixed

Silver rises to two-year high but gold slips

Precious metals ended mixed on Friday, 03 September 2010 at Comex. Silver prices rose to two-year highs and gold prices fell from its two month highs. Gold prices fell as the job report at Wall Street checked in better than expected thereby decreasing 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 $1,251.1 an ounce, lower by $2.3 (0.2%) on the New York Mercantile Exchange. Prices fell from two-month high levels. For the week, gold ended higher by 1%, up for fifth consecutive week.

Gold ended the month of August 2010 higher by 5.6% after ending July lower by 5%. It was the worst monthly loss for gold since December 2009. 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 15%.

On Friday, December Comex silver futures ended higher by 28 cents (1.4%) to $19.95. It was silver's highest close since March 2008, when it closed at 19.89 an ounce. For the week, silver ended higher by 3.8%. For the month of August, silver ended higher by 8%. In 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 13%.

The Labor Department in US reported on Friday, 03 September 2010 that the U.S. economy shed 54,000 nonfarm jobs in August, much smaller than an expected figure of 1,00,000. The unemployment rate ticked higher to 9.6% in August from 9.5% in the previous month.

Separately, the Institute for Supply Management in US reported on Friday, 03 September 2010 that growth slowed in the U.S. non-manufacturing sector in August, with a key index hitting 51.5%, compared with 54.3% in July. Market had expected a reading of 53.5%. A reading above 50% indicates expansion, while a reading below 50% indicates a contraction.

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.