Precious metals turn pale

Gold registers modest weekly losses but silver witnesses weekly gains

Precious metals dropped substantially on Friday, 10 June, 2011 at Comex. Prices fell as the dollar strengthened. The dollar found support on Friday following fresh concerns about Greece's debt problems. Prices also dropped in tandem with slipping oil prices.

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.



Gold for August delivery fell $13.5 or 0.9%, to end at $1,529.2 an ounce on the Comex division of the New York Mercantile Exchange on Friday. For the week, gold lost 0.9%. Gold ended the month of May lower by 1.2%.

For the year till date, gold is up by 7%. For the first quarter of FY 2011, gold ended higher by 1.3%. During 2010, gold ended higher by 30%, its tenth consecutive yearly gain.

On Friday, silver prices for July delivery fell $1.1 (2.9%) to end at $36.33. For the week, silver gained 0.4%. Silver ended the month of May lower by 21%.

Silver prices have gained 15.1% until date this year. 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 Friday, the dollar index saw a strong gain finishing up close to 0.9% near 74.80. The euro closed just above its worst levels near 1.4340 after a differing of opinions between European Central Bank President Jean Claude Trichet and German Finance Minister Wolfgang Schauble regarding the new Greece rescue package weighed on the single currency.

Crude for July delivery declined $2.64, or 2.6%, to $99.29 a barrel on the New York Mercantile Exchange. Oil futures decline 0.9% on the week.