Precious metals eke out strong monthly gains

Gold ends flat while silver gains for the day

Precious metals stayed at high levels on Monday, 28 February 2011 at Comex. Geo-political tensions kept prices at these levels. Gold ended almost flat while silver gained. The low dollar pushed up prices today.



On Monday, gold for April delivery ended higher by $0.60 (0.05%) at $1,409.9 mark on the New York Mercantile Exchange. Prices rose to a high of $1,417 during intra day trading. Last week, gold ended higher by 1.5%. For the year, gold has dropped by 0.8% till date.

Gold ended the month of February higher by 5.6% following a 6.1% drop in January 2011. 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 higher by $0.90 (2.7%) at $33.82. Prices gained 1.9% last week. Prices gained more than 20% in February 2011 after shedding 9% this year in January. For the year till date, silver is higher by 10.5%. In FY 2010, silver ended higher by 83.7%.

Traders kept a close eye on the clashes in the Mid East region. The revolt in Libya is the latest in a spate of political uprisings across the Mideast and North Africa in recent weeks.

In the currency market on Monday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, pared initial gains and dropped by 0.3%. The index lost 1% in February 2011 and is down by 2.5% on a y-t-d basis.

Economic data at Wall Street showed today that pending home sales for January fell a softer-than-expected 2.8%. The Chicago PMI for February surpassed expectations by hitting a 20-year high of 71.2. Personal income for January increased by a stronger-than-expected 1.0%, but spending increased a smaller-than-expected 0.2%

At the MCX, gold prices for April delivery closed lower by Rs 38 (0.2%) at Rs 20,923 per ten grams. Prices rose to a high of Rs 21,140 per 10 grams and fell to a low of Rs 20,876 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 342 (0.7%) higher at Rs 51,113/Kg. Prices opened at Rs 50,850/kg and rose to a high of Rs 51,470/Kg during the day's trading.