Mixed finish for precious metals

Gold ends moderately higher but silver slips

Bullion metal prices ended mixed on Monday, 09 April 2012 at Comex. Gold prices ended moderately higher but silver prices slipped. As U.S. stocks and commodity markets were closed on last Friday, in observance of Good Friday, Monday was the first opportunity for investors to react to the disappointing employment data. U.S stocks opened lower and oil traded lower. The weaker U.S. dollar index Monday was friendly for precious metals markets.

Gold for June delivery ended higher by $13.8 or 0.9%, to end at $1,643.9 an ounce on the Comex division of the New York Mercantile Exchange on Monday. The metal had shed 2.5% last week.



On Monday, silver prices for May delivery ended lower by $0.21 or 0.7% at $31.52. Last week silver lost 2.3%.

Friday's more downbeat U.S. jobs data was mildly supportive for the gold and silver because it does keep the specter of another round of quantitative easing from the U.S. Federal Reserve on the table, albeit the argument for such is still a weak one at this point.

The Labor Department in US reported on Friday, 05 April that the US economy in March added the fewest number of jobs in five months, breaking a string of strong employment gains and raising questions about the strength of the U.S. recovery. As per the report, the U.S. generated 120,000 jobs last month, well below expectations. Market had expected an increase of 210,000, seasonally adjusted. Hiring also failed to top the 200,000 mark for the first time since November.

The March report also showed that while the unemployment rate fell to 8.2%, the lowest level since January 2009, the decline stemmed entirely from people dropping out of the labor force. It's the first time that's happened this year. That's usually a negative sign because it suggests jobs have become somewhat harder to find.

On Monday, crude oil traded in negative territory during pit trade, falling to a session low of $100.81 per barrel. The energy component then spent the remainder of floor trade trending higher, but still closed the session with a 0.8% loss at $102.45 per barrel.

In the currency market on Monday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies pared earlier gains and closed the day lower by almost 0.1%.

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.

At the MCX, gold prices for June delivery closed higher by Rs 132 (0.5%) at Rs 28,329 per ten grams. Prices rose to a high of Rs 28,390 per 10 grams and fell to a low of Rs 28,210 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed lower by Rs 303 (0.53%) at Rs 55,902/Kg. Prices opened at Rs 56,228/kg and fell to a low of Rs 55,601/Kg during the day's trading.