Precious metals end nearly at daily highs

Prices gain back part of previous session's losses

Bullion metal prices ended higher on Thursday, 01 March 2012 at Comex. Prices ended the U.S. day session near their daily highs on Thursday following the big downdraft on Wednesday. Prices ran higher with higher equities and higher oil prices. The key “outside markets” were mixed for the precious metals markets on Thursday, as the U.S. dollar index was slightly higher and crude oil prices were also slightly higher.

Gold for April delivery ended higher by $10.9 or 0.6%, to end at $1,722.2 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. Prices had wavered between small gains and losses earlier, trading as low as $1,695.10 an ounce and as high as $1,726.40 an ounce. Year-to-date, gold has gained 9.9%, while prices shed 1.7% on the month of February 2012. Gold ended the month of January higher by 11%. For the year 2011, gold rose 10%.



On Thursday, silver prices for March delivery ended higher by $1.08 or 2.9% at $35.66. So far this year, silver futures have gained 28.9%. Silver gained 6.5% during February 2012. For the month of January, silver gained 19%. For the year 2011, silver shed almost 11%.

A day earlier, on Wednesday, bullions ran into a barrage of selling that began after Fed Chairman Bernanke's prepared remarks for a semiannual FOMC report to the House Financial Services Committee. Bernanke's comments contained no surprise, but they also lacked any kind of reaffirmed commitment to an accommodative monetary policy. Bernanke said that keeping monetary stimulus is warranted but climbing energy costs would likely hike inflation temporarily and that the decline in the nation's jobless rate had been more rapid than expected.

In the currency market on Thursday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies stayed steady and rose marginally higher earlier during the day. Yesterday, the European Central Bank disclosed that it recently issued more than $700 billion in three-year loans to the continent's banks.

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.

Among domestic data awaited at Wall Street, the number of Americans filing first-time claims for unemployment benefits last week fell 2,000 to 351,000, the lowest since March 2008. Separately, government data showed spending climbed 0.2% as incomes rose 0.3% in January, both less than expected.

Another report from the government had construction spending slipping 0.1% in January, marking the first monthly drop since July. And, the Institute for Supply Management said its manufacturing index fell to 52.4% last month from 54.1% in January. Market was expecting a rise to 55%.

At the MCX, gold prices for April delivery closed lower by Rs 27 (0.09%) at Rs 27,925 per ten grams. Prices rose to a high of Rs 28,022 per 10 grams and fell to a low of Rs 27,730 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed higher by Rs 687 (1.1%) at Rs 60,317/Kg. Prices opened at Rs 59,825/kg and rose to a high of Rs 60,706/Kg during the day's trading.