Bullion metals lose some of their sheen

Strong dollar takes away some shine

Bullion metals lost some of their sheen on Monday, 01 August 2011 as the dollar rallied on news that U.S. lawmakers prepared to vote on a deal to raise the debt ceiling and deal with deficits. A weaker than expected ISM data put the losses under check.

Gold for December delivery lost $9.5, or 0.6%, to settle at $1,621.7 an ounce on the Comex division of the New York Mercantile Exchange on Monday. It earlier traded as low as $1,608.2 an ounce.



Gold gained 1.9% last week, and advanced 8.5%, having added $128.40 an ounce for the month of July.

Silver tracked gold lower on Monday. September silver shed 80 cents, or 2%, to trade at $39.31 an ounce.

Silver ended flat last week. It advanced 15% for July, however.

Late on Sunday, Obama announced a deal between Republicans and Democrats to cut spending and raise the debt limit, easing worries about the likely damage that a failure to reach an agreement would have inflicted. The Congress will still need to pass the relevant legislation into law.

As per latest reports, congressional leaders reached a bipartisan agreement to raise the debt ceiling by at least $2.1 trillion, sufficient to serve the government's needs into 2013. Republican and Democratic leaders now have to sell the deal to skeptical members of their own parties ahead of an 2 August deadline.

US stocks slipped on Monday after the release of the latest ISM Index, which made a surprisingly sharp drop to 50.9 for July from 55.3 for the prior month.

The dollar was in strong shape today. The dollar index, which weighs the strength of the dollar against a basket of six competing currencies, rose by 0.8%.

At the MCX, gold prices for June delivery closed higher by Rs 17 (0.07%) at Rs 24,152 per ten grams. Prices rose to a high of Rs 24,251 per 10 grams and fell to a low of Rs 23,928 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed lower by Rs 740 (1.23%) at Rs 59,374/Kg. Prices opened at Rs 59,910/kg and fell to a low of Rs 58,833/Kg during the day's trading.