Bullions revive upward journey following last week's sell off

Weak dollar and higher US stocks impart the shine

Precious metals ended substantially higher on Monday, 28 November 2011 at Comex. Prices ended solidly higher on Monday on bargain hunting and short covering following selling pressure seen last week. Prices also got a good push as dollar turned weak.

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 ended higher by $25.1 or 1.5%, to end at $1,710.8 an ounce on the Comex division of the New York Mercantile Exchange on Monday. Last week, the yellow metal lost 2.3%. For the month of October, gold gained 6.3%. It registered a rise of 8% for the third quarter ending September.

On Monday, silver prices for December delivery rose $1.15 or 3.7% to end at $32.16. Last week, silver lost 4.3%. For the month of October, silver gained 14%. It registered a drop of 14% for the third quarter ending September.

In the currency market on Monday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies dropped by almost 0.5%.

US stocks on Monday were in a more upbeat mood following an impressive start to the U.S. holiday shopping season and on some renewed hope the European Union's sovereign debt crisis has some fixes in the works.

Latest reports indicate that European officials have reached an agreement on how to leverage the euro zone's 440 billion euro ($586 billion) European Financial Stability Facility, ahead of a Tuesday meeting of European finance ministers. The fund might insure the bonds of debt-torn nations with guarantees of as much as 30% of each issue.

Holiday sales data indicate that U.S. retail sales totaled $52.4 billion during the holiday weekend, with the average shopper spending $398.62, up from $365.34 for the year-earlier period.

At the MCX, gold prices for December delivery closed higher by Rs 328 (1.15%) at Rs 28,737 per ten grams. Prices rose to a high of Rs 28,849 per 10 grams and fell to a low of Rs 28,475 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed higher by Rs 1,126 (2.1%) at Rs 55,455/Kg. Prices opened at Rs 54,500/kg and rose to a high of Rs 55,777/Kg during the day's trading