Mixed finish for bullions

Gold loses luster but silver climbs up

Bullion metal prices ended mixed on Tuesday, 13 March 2012 at Comex. Gold prices lost luster but silver prices moved up. A strong dollar, better than expected retail sales data and comments from latest FOMC meet pushed gold prices lower.

Gold for April delivery ended lower by $5.6 or 0.3%, to end at $1,694.2 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. Prices edged up 0.1% last week. Prices shed 1.7% on the month of February 2012.

On Tuesday, silver prices for May delivery ended higher by $0.17 or 0.5% at $33.58. Last week, silver declined 1%. Silver gained 6.5% during February 2012.



Data today featured February retail sales, which increased by 1.1%. Sales less autos increased by 0.9%. Both were better than what had been widely predicted. Business inventories for January hardly generated any buzz among market participants. Inventories reportedly increased by 0.7%, which is slightly greater than the 0.6% increase that had been broadly expected.

In the currency market on Tuesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.4%.

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 the latest policy statement from the FOMC, the Fed opted to keep its fed funds target rate at 0.00% to 0.25% and maintained its outlook that low rates of resource utilization and subdued inflation are likely to warrant exceptionally low levels for the fed funds rate at least through late 2014. The Fed said it expects "moderate economic growth over the coming quarters and consequently anticipates that the unemployment rate will decline gradually," with the rate falling already.

At the MCX, gold prices for April delivery closed lower by Rs 140 (0.5%) at Rs 27,832 per ten grams. Prices rose to a high of Rs 27,958 per 10 grams and fell to a low of Rs 27,760 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed lower by Rs 133 (0.22%) at Rs 58,259/Kg. Prices opened at Rs 58,479/kg and fell to a low of Rs 57,815/Kg during the day's trading.