Precious metals end higher for second straight day

Prices rise as dollar stays weak and on positive developments from Europe

Precious metals ended higher for second consecutive day on Monday, 24 October 2011 at Comex. Prices shot up on optimism as comments from European officials suggested progress toward a broad debt plan instilled optimism about the region. A somber dollar also imparted the shine.



Gold for December delivery ended modestly higher by $16.2 or 1%, to end at $1,652.3 an ounce on the Comex division of the New York Mercantile Exchange on Monday. Last week, gold lost 2.8%, erasing all of its prior week's gains. For the month of September, gold shed 11%. It registered a rise of 8% for the third quarter ending September.

On Monday, silver prices for December delivery rose $0.45 or 1.5% to end at $31.65. Last week, silver shed 3%. For the month of September, silver shed 28%. It registered a drop of 14% for the third quarter ending September.

Metals tracked equity markets' gains on Monday, as U.S. stocks moved broadly higher following key earnings, with support from Apple and Caterpillar. Better than expected data in the manufacturing zone out of China also helped prices move up.

In the currency market on Monday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, ended lower by 0.3%.

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 December delivery closed lower by Rs 42 (0.15%) at Rs 26,726 per ten grams. Prices rose to a high of Rs 26,947 per 10 grams and fell to a low of Rs 26,661 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed higher by Rs 43 (0.08%) at Rs 53,077/Kg. Prices opened at Rs 53,188/kg and rose to a high of Rs 53,645/Kg during the day's trading.