Mixed finish for bullion metals

Yellow metal strikes all time record high while silver drops

Precious metals ended mixed on Tuesday, 09 August 2011 at Comex. Gold struck another all time record high while silver prices dropped. Investors continued to flock to bullions, which are seen as much safer and better bets in times of turbulence. Prices rose when bullion market closed ahead of Fed's latest FOMC comments.



Gold for December delivery rose $29.8 or 1.7%, to end at $1,743 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. During intra day trading, prices rose to a high of $1,782.5. It was all time record high price for the yellow metal. Gold has risen by 23% this year. This week, itself, it has gained almost 5.5%. Last week, gold gained 1.3%.

On Tuesday, silver prices for September delivery fell by $1.5 (3.8%) to end at $37.88. Last week, silver lost 1.4%.

After staying volatile earlier during the day, US stocks rallied during the final hour of trading after latest FOMC comments from Fed. The Fed announced it would keep interest rates, now near 0%, at ultralow levels at least through mid-2013, the first time it put a time frame on its low-rate stance. The monetary committee also lowered its outlook for the pace of recovery, and discussed a range of policy tools to stimulate growth.

The United States last Friday lost its triple-A debt rating from Standard & Poor's for the first time in history, with the credit-rating agency saying the political system of the world's top economy has become less stable and that budget cutting announced earlier this week didn't go far enough.

S&P lowered its rating on the U.S. by a notch to AA+ and, to compound the embarrassment, said the outlook is negative as well, as it threatened another reduction in two years. The rating agency said the deal reached by lawmakers to cut the federal deficit by an estimated $2.1 trillion over a decade didn't go far enough, and “America's governance and policymaking is becoming less stable, less effective, and less predictable than what was previously believed.

At the MCX, gold prices for October delivery closed higher by Rs 489 (1.93%) at Rs 25,731 per ten grams. Prices rose to a high of Rs 26,198 per 10 grams and fell to a low of Rs 25,235 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed lower by Rs 1,777 (3%) at Rs 57,411/Kg. Prices opened at Rs 59,248/kg and fell to a low of Rs 56,944/Kg during the day's trading.