Precious metals glitter

Precious metals end losing streak

Precious metal prices ended substantially higher on Wednesday, 30 March 2011 at Comex. Prices went up after staying somber for quite a few sessions. Traders were back as precious metals had dropped from their all time highs. Continuing Mid East and North African crisis together with euro zone debt problems increased the appeal of precious metals against an alternate investment. Prices rose despite a strong dollar.



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 June delivery rose $7.4, or 0.5%, to end at $1,424.9 an ounce on the Comex division of the New York Mercantile Exchange. It traded at a low of $1,413.1 during intra day trading and rose to a high of $1,431.7. Gold had ended lower in last four sessions. Last week, gold gained 0.7%.

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 rose 52 cents (1.4%) to end at $37.51. Last week, silver gained 5.7%. 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 Wednesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.2%. But the dollar fell against the euro after a European Central Bank board member's comments suggested the ECB could raise rates earlier than some expected.

Among other developments across the world, violence continued as forces loyal to Libyan leader Moammar Gadhafi waged counterattacks, reversing some recent gains by rebels.

Among economic data expected for the day, The ADP report showed that U.S. private-sector companies added 201,000 jobs in March. Since the number was on par with what had been expected, participants had only a muted response.

At the MCX, gold prices for April delivery closed higher by Rs 87 (0.21%) at Rs 20,982 per ten grams. Prices rose to a high of Rs 21,060 per 10 grams and fell to a low of Rs 20,874 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed higher by Rs 598 (1.08%) at Rs 55,763/Kg. Prices opened at Rs 55,187/kg and rose to a high of Rs 55,990/Kg during the day's trading.