Record runs continue for bullions

Investors continue flock to bullions on growing concerns over US economy

Precious metals ended at record highs on Wednesday, 03 August 2011 at Comex. Gold prices soared with silver following it as investors flocked to precious metals following fears of another recession. Though private sector job report showed that US added more jobs than expected in July, ISM's service sector index and factory order reports disappointed. A weak dollar also led investors flock around bullions.

Gold for December delivery rose $21.8 or 1.3%, to end at $1,666.3 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. During intra day trading, prices rose to a high of $1,675.9.

On Wednesday, silver prices for September delivery rose by $1.67 (4.2%) to end at $41.76.

In the latest dose of data in US the ADP report showed U.S. companies added 114,00 positions in July, compared with expectations around a 85,000 rise. But on the flip side, the Institute for Supply Management said its service-sector index fell to 52.7% in July, a 17-month low, from 53.3% in June. Market had expected the services index to rise to 53.5%. In addition, the Commerce Department reported that factory orders fell 0.8% in June. Market had anticipated a 0.9% drop.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by almost 0.5%.

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.

At the MCX, gold prices for October delivery closed higher by Rs 249 (1.04%) at Rs 24,055 per ten grams. Prices rose to a high of Rs 24,245 per 10 grams and fell to a low of Rs 23,920 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed higher by Rs 1,854 (3.12%) at Rs 61,180/Kg. Prices opened at Rs 59,551/kg and rose to a high of Rs 61,880/Kg during the day's trading.