Precious metals drop

Both gold and silver prices shed around 0.7%

Bullion metal prices ended lower on Wednesday, 18 April 2012 at Comex. Prices fell as physical demand of gold seemed to drop. A steady dollar also restricted price rise. Prices fell in tandem with equities, which slipped over disappointing earning reports.

Gold for June delivery ended lower by $11.5 or 0.7%, to end at $1,639.6 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. The metal had gained 1.8% last week.



On Wednesday, silver prices for May delivery ended lower by $0.19 or 0.6% at $31.49. Last week silver lost 2.3%.

In the currency market on Wednesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.02%.

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.

US stocks slipped on Wednesday. For the entire day, the stock market was stuck in negative territory with a modest loss. Pressure initially stemmed from selling in Europe, but it has persisted amid a lack of leadership. Stocks retreated a day after the S&P 500 Index tallied its largest jump in a month, as investors found results from tech bellwethers lacking.

Confidence in the early going was undermined by renewed concerns about Spain's financial health, which also undercut Europe's major bourses. Financials were a heavy drag during morning trade as market participants reconsidered their exposure to Spain.

Among major earning reports, semiconductor maker Intel projected second-quarter gross margins below some estimates, and IBM reported quarterly profit that topped expectations but fell short on revenue targets.

At the MCX, gold prices for June delivery closed higher by Rs 36 (0.12%) at Rs 28,518 per ten grams. Prices rose to a high of Rs 28,580 per 10 grams and fell to a low of Rs 28,481 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed higher by Rs 48 (0.08%) at Rs 56,064/Kg. Prices opened at Rs 56,150/kg and rose to a high of Rs 56,280/Kg during the day's trading.