Precious metals continue to glitter

Gold and silver rise for seventh straight day

Precious metal prices witnessed new highs and they ended substantially higher once again on Thursday, 21 April 2011 at Comex. It was seventh consecutive day of straight gains for the bullions. Prices rose riding on the back of weak dollar and on inflation concerns as investors sought to bullions as a safer investment as debt problems continue to haunt the developed countries. Thursday was the last trading day of the week as market was closed on Friday, 22 April because of Good Friday holiday.

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.

For gold, weakness in the U.S currency also plays up the metal as a protector of wealth and any fears of currency debasement.

Gold for June delivery rose $4.9, or 0.3%, to end at $1,503.8 an ounce on the Comex division of the New York Mercantile Exchange. During intra day trading, gold reached a high of $1,509.6. It was a record close and record intra day high for yellow metal. For the week, gold gained 1.2%.

For the year till date, gold is up by 5.8%. Gold ended the month of March higher by 2.1%. For the first quarter of FY 2011, gold ended higher by 1.3%. For the year of 2010, gold ended higher by 30%, its tenth consecutive yearly gain.

On Thursday, silver prices for May delivery rose $1.6 (3.6%) to end at $46.06. It was highest close for silver in more than three decades. For the week, silver gained 8.2%. Prices have gained 46.1% till date this year. Prices gained 12% in March 2011. Silver eked out a gain of 22% for the first quarter of this year. In FY 2010, silver ended higher by 83.7%.

In the currency market on Thursday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by almost 0.4%. The dollar was weaker against most major currencies for the entire week. In the course of the week, the euro touched its highest against the U.S. currency since January 2010.