Volatile bullions manage to add to gains

Gold and silver lose try to regain back some of their lost appeal

Precious metals witnessed a day of volatile trading on Tuesday, 15 November 2011 at Comex. Ultimately, prices ended higher. Gold registered modest gains while silver witnesses considerable gains. Bullions lost their luster earlier during the day as dollar firmed up considerably. Economic data at Wall Street and on the global front dominated during the day.



Gold for December delivery ended higher by $3.8 or 0.2%, to end at $1,782.2 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. It touched a high of $1,787.80 and a low of $1,707.20 during the session. Last week, gold gained 1.8%. For the month of October, gold gained 6.3%. It registered a rise of 8% for the third quarter ending September.

On Tuesday, silver prices for December delivery rose $0.43 or 1.3% to end at $34.46. Last week, silver gained 1.8%. 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 Tuesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 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.

Most participants paid close attention to action in Europe this morning. Rising yields on Italy's debt and pressure against the region's major bourses undermined their sentiment earlier during the day but stocks at Wall Street managed to end the day with modest gains.

Economic data for the day showed that overall retail sales increased by 0.5%, but sales less autos actually increased by 0.6%. Meanwhile, producer prices for October proved cooler than thought, given the 0.3% decline in PPI and flat reading on core PPI.

Separately, the Empire State Manufacturing Survey surprised some by turning incrementally positive.

In the euro zone, the European Union's statistics agency reported earlier Tuesday that third-quarter gross domestic product across the region expanded by 0.2% compared with the second quarter and grew 1.4% versus the third quarter of 2010. But market still fear the region's long-running debt crisis could soon spell a return to recession.

At the MCX, gold prices for December delivery closed higher by Rs 233 (0.8%) at Rs 29,171 per ten grams. Prices rose to a high of Rs 29,212 per 10 grams and fell to a low of Rs 28,833 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed higher by Rs 770 (1.3%) at Rs 57,985/Kg. Prices opened at Rs 58,338/kg and fell to a low of Rs 57,014/Kg during the day's trading.