Precious metals continue to add glitter

Prices move up as crude soars triggering inflationary fears

Precious metal prices rose substantially on Monday, 04 March 2011 at Comex. Rising crude oil prices increased fears of inflation thereby enhancing the appeal of bullions as alternate investment. Prices also rose as dollar pared its initial gains partly.



Gold for April delivery rose $5.90, or 0.4%, to $1,434.50 an ounce on the Comex division of the New York Mercantile Exchange. Last week, gold gained 1.4%.

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 increased by 54 cents (1.5%) to end at $34.865. Last week, silver gained 7.4%. Prices gained more than 20% in February 2011 after shedding 9% this year in January. For the year till date, silver is higher by 15%. In FY 2010, silver ended higher by 83.7%.

Oil prices continued to soar on Monday, 07 March 2011 but finally settled well below its intra day high at Nymex. Prices continued to climb up as turmoil in the Middle East, especially in Libya, an important oil port, continued. Libya remains the scene of fighting between pro and antigovernment forces, with each side claiming control of a major oil port on Sunday.

On Monday, crude oil futures for light sweet crude for April delivery closed higher by $1.02 (1%) at $105.44/barrel. Prices touched a high of $106.95 during intra day trading. Last week, prices closed higher by 6.7%. This was the highest close for crude since September 2008.

US stocks slipped substantially at Wall Street on Monday as moods were dampened by higher oil prices which triggered fears that rising crud price will deter the recovery of the economy.

In the currency market on Monday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose moderately initially but ultimately ended with 0.1% gain.

At the MCX, gold prices for April delivery closed higher by Rs 31 (0.15%) at Rs 21,129 per ten grams. Prices rose to a high of Rs 21,274 per 10 grams and fell to a low of Rs 21,070 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 461 (0.9%) higher at Rs 53,878/Kg. Prices opened at Rs 53,500/kg and rose to a high of Rs 54,767/Kg during the day's trading.