Precious metals close mixed as crude prices just shoot up
Precious metal prices closed mixed today. Gold prices increased but silver prices fell at New York. Gold prices increased to record level since 1980. Prices increased after crude futures touched all time high of $86/barrel and the greenback weakened against its major rival currencies boosting the appeal for the precious metal. Gold has traditionally been used as a safe-haven asset against rising inflation.
Comex Gold for December delivery rose $8.4 (1.1%) to close at $762.2 an ounce on the New York Mercantile Exchange today, Monday, 15 October, 2007. The price crossed $765 during intra day trading. Gold gained 0.9% last week and was the metal’s 7th weekly gain in eight weeks.
Comex Silver futures for December delivery fell 4.8 cents (0.4%) to $13.855 an ounce. The metal has climbed 7.1% this year.
Crude prices increased today and reached an all time high after fresh tension surfaced between Turkey and Iraq. On the other hand, dollar weakened again against the euro ahead of the G7 meeting this week and on speculation interest rates in Europe will rise faster than in the U.S.
In recent times, the weakening of dollar have continued to affect the price of the metal. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices.
Dollar had been witnessing a free fall since Federal Reserve cut interest rates by half percentage point. The U.S. currency has lost 6.9% against the euro this year.
Gold prices have jumped 15% during the third quarter and it is the most since 1999. The yellow metal has climbed 19% this year. Since the last rate cut, prices have gone up by more than 3.5%.
Last week, Citigroup raised its forecast for the average gold price this year to $684 an ounce from $672 and increased the 2009 estimate to $800 from $750. The 2010 estimate was raised to $820 from $594. The forecast for 2008 was left unchanged at $750.
At the MCX, gold prices for December delivery closed at Rs 9663 per 10 grams. The closing price is Rs 74 (0.8%) higher as against previous closing price. Prices rose to a high of Rs 9684 per 10 grams and fell to a low of Rs 9594 per 10 grams during the day’s trading.
At the MCX, silver prices for December delivery closed Rs 29 (0.16%) lower at Rs 18,279/Kg. Prices opened at Rs 18,340/kg and fell to a low of Rs 18,241/Kg during the day’s trading.