Mixed finish for bullions

Gold ends mildly lower while silver climbs up

Precious metals ended mixed on Thursday, 29 September 2011 at Comex. Yellow metal prices dropped after oscillating between red and green for the entire day. Prices remained a bit volatile after dollar slipped and the German parliament earlier Thursday voted overwhelmingly to increase the size and flexibility of the euro-zone rescue fund.



Gold for December delivery dropped $0.80 or 0.1%, to end at $1,617.3 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. 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 Thursday, silver prices for December delivery rose $0.39 (1.3%) to end at $30.52. Last Friday, silver lost 18% on single day. For the month of August, silver gained 4.1%.

More than half of the euro zone's 17 members have now approved the package, which boosts the European Financial Stability Facility's lending power to 440 billion euros ($599 billion) from €250 billion and gives it the ability to buy sovereign bonds, provide credit lines to governments and facilitate bank recapitalizations.

In the currency market on Thursday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, ended lower by 0.33%.

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.

Among economic data expected for the day, government data showed on Thursday that the U.S. economy expanded at a slightly faster pace than previously thought in the second quarter of 2011, led by a pickup in consumer and construction spending. Gross domestic product rose at an annual rate of 1.3% in the second quarter. The rate of GDP growth was faster than the government's prior reading of 1.0%.

The Labor Department reported that the number of Americans who filed applications for unemployment benefits sank last week to the lowest level since early spring. Jobless claims fell by 37,000 to 391,000 in the week ended 24 September. Initial claims from two weeks ago were revised up to 428,000 from an original reading of 423,000.

At the MCX, gold prices for December delivery closed higher by Rs 56 (0.21%) at Rs 26,011 per ten grams. Prices rose to a high of Rs 26,210 per 10 grams and fell to a low of Rs 25,700 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed higher by Rs 835 (1.7%) at Rs 51,245/Kg. Prices opened at Rs 51,270/kg and rose to a high of Rs 52,590/Kg during the day's trading.