Bullions gather shine

Prices go up as Europe's debt troubles continue

Precious metals ended higher on Tuesday, 13 September 2011 at Comex. Prices were back to add to their gains after fiscal and financial conditions in Europe once again worried investors and traders started selling stocks earlier during the day. The dollar stayed steady in the course of the day. Europe's sovereign debt crisis problems enticed traders back to precious metal.



Weak economic data and the prospects for more fiscal stimulus have driven gold to record highs this year earlier last month, as investors seek a hedge against falling equities and as some fear potential for inflation and currency devaluation, particularly the U.S. dollar debasement.

Gold for December delivery rose $16.8 or 0.9%, to end at $1,830.1 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. The contract had traded as high as $1,838.90 an ounce and as low as $1,794.80 an ounce during intra day trading. Last week, gold lost 1%. It rose by $201 or 12% during the month of August.

On Tuesday, silver prices for December delivery rose $0.98 (2.4%) to end at $41.19. Last week, silver lost 3.4%. For the month of August, silver gained 4.1%.

Caution related to precarious fiscal and financial conditions in Europe initially kept stocks in check this morning, but before long, bank stocks and other financial issues began to bounce, providing an impetus for the broad market to make its way higher.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, rose by 0.1%.

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 441 (1.6%) at Rs 28,234 per ten grams. Prices rose to a high of Rs 28,304 per 10 grams and fell to a low of Rs 27,678 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed higher by Rs 1,782 (2.8%) at Rs 65,568/Kg. Prices opened at Rs 63,998/kg and rose to a high of Rs 65,690/Kg during the day's trading.