Bullions shed glaze

Gold ends little lower while silver closes at session lows

Precious metals ended lower on Monday, 19 December 2011 at Comex. While gold ended marginally lower, silver closed at session lows. The dollar traded in the higher range against the competing currencies for most part of the day. Trading has moved into a holiday mode, whereby volumes are lighter and price movements generally smaller. The market place did get a bit of a jolt overnight when news reports said North Korean leader Kim Jong II had died. However, the market uncertainty was not extreme.



Gold for February delivery ended lower by $1.2 or 0.1%, to end at $1,596.7 an ounce on the Comex division of the New York Mercantile Exchange on Monday. It had climbed to a high of $1,611.50 earlier, though it also touched a low of $1,585.50. Last week, the yellow metal lost 6.8%.

On Monday, silver prices for March delivery fell $0.80 or 2.7% to end at $28.87. Last week, silver lost 8%.

In the currency market on Monday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies climbed 0.05%. The dollar rose to 11 month high mainly against the euro last week.

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

U.S. stocks turned lower on Monday, 19 December 2011 extending last week's losses after comments from the European Central Bank chief injected a fresh note of pessimism into the market. Stocks rolled over after failing to build on the modest gains made during the early going. The downturn was led by financials.

Draghi stressed the importance of a tighter fiscal union among European nations. But he also undercut hopes that the central bank would be more aggressive in helping struggling countries by expanding its bond purchases.

At the MCX, gold prices for February delivery closed higher by Rs 56 (0.2%) at Rs 27,692 per ten grams. Prices rose to a high of Rs 27,795 per 10 grams and fell to a low of Rs 27,500 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed lower by Rs 753 (1.4%) at Rs 52,961/Kg. Prices opened at Rs 53,400/kg and fell to a low of Rs 52,544/Kg during the day's trading.