Mixed finish for precious metals

Gold stays steady but silver slips

Precious metals ended mixed on Monday, 24 January 2011 at Comex. Lower dollar helped the yellow metal rise but silver slipped.

On Monday, gold for February delivery rose by $3.5 (0.5%) ending at $1,344.5 an ounce on the New York Mercantile Exchange. During intra day trading, prices rose to a high of $1,352.4. Last week, gold ended lower by 1.4%. Gold prices have dropped 5.2% this year till date.



For the year of 2010, gold ended higher by 30%, its tenth consecutive yearly gain.

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 bullion metals have registered increase in prices despite strong dollar in recent times and vice versa.

On Monday, March Comex silver futures ended lower by $0.11 (0.4%) at $27.31. Prices lost 3.1% last week. Prices have shed 11.9% this year till date.

In FY 2010, silver ended higher by 83.7%.

In the currency market on Monday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies dropped.

Upbeat fourth quarter results from GE and Google on last Friday further reinforced the chances of a faster economic recovery. The same reduced the appeal of precious metals as an alternate investment.

Bullion metal prices are expected to continue with their joyride in the coming months with gold expected to reach between $1,600 and $1,700 an ounce and silver likely to attempt to test highs in the $50 area.

At the MCX, gold prices for February delivery closed lower by Rs 72 (0.35%) at Rs 19,997 per ten grams. Prices rose to a high of Rs 20,139 per 10 grams and fell to a low of Rs 19,985 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 367 (0.85%) lower at Rs 42,341/Kg. Prices opened at Rs 42,820/kg and fell to a low of Rs 42,256/Kg during the day's trading.