Mixed finish for precious metals

Gold rises but silver slips

Precious metal prices witnessed mixed finish on Thursday, 17 March 2011 at Comex. Gold prices went up but silver closed lower despite opening the day in the black. Weak dollar and inflation data supported gold prices.

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.




Gold for April delivery rose $8.2, or 0.6%, to end at $1,404.2 an ounce on the Comex division of the New York Mercantile Exchange. It closed above the $1,400 range for the first time this week. Last week, gold lost 0.5%.

Gold ended the month of February higher by 5.6% following a 6.1% drop in January 2011. For the year of 2010, gold ended higher by 30%, its tenth consecutive yearly gain.

Silver prices for May delivery fell $0.21 (0.6%) to end at $34.26. Last week, silver gained 1.7%. Prices gained more than 20% in February 2011 after shedding 9% this year in January. In FY 2010, silver ended higher by 83.7%.

In the currency market on Thursday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, weakened. The dollar fell mainly against the yen.

Economic data showed that the consumer price index rose 0.5% last month. The so-called core rate, which strips out the volatile food and energy categories, rose a lesser 0.2%. Consumers paid higher prices in February, mainly for gasoline and vegetables, as the cost of many basic staples continued a recent upward trend.

At the MCX, gold prices for April delivery closed higher by Rs 70 (0.34%) at Rs 20,722 per ten grams. Prices rose to a high of Rs 20,745 per 10 grams and fell to a low of Rs 20,553 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 191 (0.4%) lower at Rs 52,012/Kg. Prices opened at Rs 52,100/kg and fell to a low of Rs 51,650/Kg during the day's trading