Bullions shed some shine

Gold futures end the U.S. day session near the daily low due to profit taking

Bullion metal prices ended lower on Wednesday, 08 February 2012 at Comex. Both gold and silver slipped as the dollar firmed up. Comex April gold futures ended the U.S. day session near the daily low as some profit-taking pressure featured. Meantime, the crude oil market lost most of its early gains to trade just steady to firmer on the day.

Gold for April delivery ended lower by $17.1 or 1%, to end at $1,731.3 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. Prices had earlier veered between small gains and losses, trading as high as $1,754.80 an ounce and as low as $1,729.10 an ounce. Last week, gold gained 0.5%.



Gold ended the month of January higher by 11%. For the year 2011, gold rose 10%.

On Wednesday, silver prices for March delivery ended lower by 49 cents or 1.4% at $33.7. Last week, silver shed 0.1%. For the month of January, silver gained 19%. For the year 2011, silver shed almost 11%.

In the currency market on Wednesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.15%.

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 bullions have registered increase in prices despite strong dollar in recent times and vice versa.

In Athens, Greek Prime Minister Lucas Papademos met with other political leaders after twice postponing the meeting in striving to finalize a second round of rescue funds. The ECB is ready to exchange its holdings of Greek government bonds to help reduce Greek's debt load. A debt- restructuring deal between the Greek government and the private sector had been reported as very close to being agreed upon. But reports indicate that issues with the European Central Bank may at least temporarily block any Greek debt-restructuring agreement.

The major equity averages at Wall Street mustered modest gains in the early going, but the move proved unsustainable. As sellers applied pressure each of the three major indices slipped into the red but managed to end the day with minor gains.

At the MCX, gold prices for April delivery closed lower by Rs 197 (0.7%) at Rs 28,176 per ten grams. Prices rose to a high of Rs 28,434 per 10 grams and fell to a low of Rs 28,125 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed lower by Rs 444 (0.78%) at Rs 56,821/Kg. Prices opened at Rs 57,352/kg and fell to a low of Rs 56,689/Kg during the day's trading.