Bullions end their three-day losing streak

Prices shine as dollar weakens and Europe shows support for Greece

Precious metals ended their three-day losing streak and ended higher on Tuesday, 27 September 2011 at Comex. Prices rose following the improved sentiment that came amid reports that officials in Europe are planning to shore up the region's fiscal and financial problems. A weak dollar also pushed up bullion prices.



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 December delivery rose $57.7 or 3.6%, to end at $1,652.5 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. During intra day trading, prices rose to a high of $1,679.2. Last week, gold lost 9.7%, including Friday's 5.7% drop, the largest one day percentage fall in a very long time. It rose by $201 or 12% during the month of August.

On Tuesday, silver prices for December delivery rose $1.56 (5.2%) to end at $31.54. Last Friday, silver lost 18% in on single day. For the month of August, silver gained 4.1%.

US stocks extended gains for third straight day on Tuesday after German Chancellor Angela Merkel expressed support for Greece on optimism that European leaders will reach an agreement to contain the region's debt crisis.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, was trading lower by 0.5%.

Among economic data expected for the day, the Conference Board said its survey of consumer confidence last month showed a slight improvement, rising to a reading of 45.4 from 45.2 in August, but missing economists' forecasts for a rebound to 46.1.

At the MCX, gold prices for October delivery closed higher by Rs 500 (1.9%) at Rs 26,187 per ten grams. Prices rose to a high of Rs 26,677 per 10 grams and fell to a low of Rs 26,082 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed higher by Rs 1,412 (2.7%) at Rs 52,989/Kg. Prices opened at Rs 52,495/kg and rose to a high of Rs 55,925/Kg during the day's trading.