Gold and silver continue to glitter

Yellow metal ends at two-month highs

Precious metal prices ended higher on Thursday, 02 February 2012 at Comex. Both gold and silver prices rose as the dollar index stayed weak earlier during the day but ultimately ended mildly higher. Gold prices ended the U.S. day session higher and near the daily high. Prices hit a fresh two-month high today.

Gold for April delivery ended higher by $9.8 or 0.6%, to end at $1,759.3 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. It traded as low as $1,743.30 and as high as $1,763.80 an ounce. It started floor trading veering between small gains and losses, but found firmer footing as the day progressed.



Gold ended the month of January higher by 11%. Last week, gold gained 4.2%. For the year 2011, gold rose 10%.

On Thursday, silver prices for March delivery rose $0.37 or 1.1% to end at $34.16. For the month of January, silver gained 19%. Last week, silver rose 6.7%. For the year 2011, silver shed almost 11%.

In the currency market on Thursday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies stayed in the red for almost the entire day but ultimately rose by almost 0.05%.

Gold and silver both started their rallies right around the time of Thursday morning's testimony by Fed Chairman Bernanke to the U.S. House of Representatives. While Bernanke said nothing really new or surprising, he reiterated the U.S.'s path to better economic times remains a tough one. It's likely that gold rallied in part due to Bernanke's general reaffirmation of last week's FOMC statement that pledged continued low interest rates well into 2013 and hinted more quantitative easing could be forthcoming, which was bullish for the precious metals.

There were a few fresh developments coming out of the European Union debt crisis on Thursday. A Spanish bond auction saw mixed results but with lower yields fetched. A debt- restructuring deal between the Greek government and the private sector has still not been reached, but an agreement is reportedly closer.

Among economic reports expected for the day at Wall Street on Thursday, weekly initial jobless claims proved slightly better than expected by easing down to 367,000. However, that report didn't generate much excitement with the highly-anticipated monthly payrolls report due tomorrow.

The rally among precious metals is expected to continue into coming days. Crude and the dollar index are the two key outside markets that will continue to have a daily influence on gold and silver prices.

At the MCX, gold prices for April delivery closed higher by Rs 85 (0.3%) at Rs 28,504 per ten grams. Prices rose to a high of Rs 28,560 per 10 grams and fell to a low of Rs 28,336 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed higher by Rs 189 (0.33%) at Rs 57,023/Kg. Prices opened at Rs 56,750/kg and rose to a high of Rs 57,381/Kg during the day's trading.