Record high strings continue for precious metals

Both gold and silver witness record close for fourth straight day

Precious metals ended substantially higher on Monday, 18 April 2011 at Comex. It was fourth consecutive day of straight gains for the bullions. Prices rose on inflation concerns as investors sought to bullions as a safer investment option after Standard and Poor revised its outlook for U.S. debt to negative from stable, casting a pall over the finances of the world's largest economy. Gold also caught a tailwind from concerns about Finland and Greece.

Gold for June delivery rose $6.9, or 0.5%, to end at $1,492.9 an ounce on the Comex division of the New York Mercantile Exchange. It was a record close for yellow metal. Last week, gold gained 0.8%.

For the year till date, gold is up by 5%. Gold ended the month of March higher by 2.1%. For the first quarter of FY 2011, gold ended higher by 1.3%. For the year of 2010, gold ended higher by 30%, its tenth consecutive yearly gain.

On Monday, silver prices for May delivery rose $0.39 (0.9%) to end at $42.95. It was highest close for silver in more than three decades. Last week, silver gained 4.8%. Prices have gained 38.9% till date this year. Prices gained 12% in March 2011. Silver eked out a gain of 22% for the first quarter of this year. In FY 2010, silver ended higher by 83.7%.

Before the start of U.S. trading, Standard & Poor's said it slashed its outlook on the U.S. to negative from stable, though it kept its triple-A rating on the world's largest economy.

Although officials tried to shoot down speculation about debt restructuring in Greece, recognition of such a possibility prompted questions about whether a restructuring would lead to similar action in Ireland and Portugal, then thoughts of the implications for the overall eurozone. Such concerns took their toll on the euro.

In the currency market on Monday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.9%.

At the MCX, gold prices for June delivery closed higher by Rs 264 (1.2%) at Rs 21,835 per ten grams. Prices rose to a high of Rs 21,857 per 10 grams and fell to a low of Rs 21,553 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed higher by Rs 1,104 (1.8%) at Rs 63,494/Kg. Prices opened at Rs 62,503/kg and rose to a high of Rs 63,987/Kg during the day's trading.