Gold closes above $1,300 mark

Prices register all time new highs once again

Precious metals glittered and ended at record highs on Tuesday, 28 September 2010 at Comex. Yellow metal prices closed above the $1,300 mark for the first time ever. Silver also shone. Prices rose as dollar dropped and economic data checked in weaker than expected.



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. But bullion metals have registered increase in prices despite strong dollar in recent times and vice versa.

On Tuesday, gold for December delivery ended at $1,308.3 an ounce, higher by $9.7 (0.8%) on the New York Mercantile Exchange. This was by far an all time highest finish for the yellow metal. Gold marked new high for the eighth time in nine session. Last week, gold ended higher by 1.6%. It was the sixth weekly gains for gold in past six weeks.

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 18.8%.

On Tuesday, December Comex silver futures ended higher by 24 cents (1.1%) at $21.71. Earlier in the day, it was trading in the red but it managed to pare losses. It was once again an all time high close for silver prices in three decades. Last week, silver ended higher by 2.7%. 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 29%.

In the currency market on Tuesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies closed lower by 0.5%.

The dollar extended losses against the euro and other major currencies after the Conference Board said its consumer-confidence index hit its lowest level since February. It dropped to a seven-month low figure of 48.5.

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 December delivery closed higher by Rs 114 (0.6%) at Rs 19,327 per ten grams. Prices rose to a high of Rs 19,347 per 10 grams and fell to a low of Rs 19,100 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 371 (1.13%) higher at Rs 33,031/Kg. Prices opened at Rs 32,604/kg and rose to a high of Rs 33,065/Kg during the day's trading