Bullions witness another day of mixed finish

Gold drops for third straight day but silver edges up

Precious metals ended mixed on Thursday, 15 December 2011 at Comex. Comex February gold futures prices turned lower for third straight day while silver rose. Comex February gold futures prices ended the U.S. day session lower on follow-through selling pressure from Wednesday's sharp losses that did rattle traders and investors. March silver futures prices closed nearer the session high on Thursday but did hit a fresh 2.5-month low early on. Silver prices have been trending lower in a choppy fashion for six weeks.

Gold for February delivery ended lower by $9.7 or 0.6%, to end at $1,577.2 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.



On Thursday, silver prices for March delivery rose $0.34 or 1.2% to end at $29.27. Last week, silver lost 1.3%.

In the currency market on Thursday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies stayed flat for most part of the day and ended lower by about 0.3%. The dollar rose to 11 month high mainly against the euro a day earlier.

There were no major, fresh developments on the European Union debt crisis scene on Thursday. A Spanish bond auction was well received on Thursday, and that was a bit of a calming effect on the market place. The Euro currency has fallen to a fresh 11-month low this week amid the EU debt crisis.

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.

US stocks rose on Thursday after the major initial claims data for the week showed a seasonally adjusted 366,000 workers filed initial jobless claims in the week ended 10 December 2011, well below forecasts and the lowest since May 2008. The figures were the latest indication that the weak jobs market is slowly building strength. The four-week moving average of new jobless claims fell to the lowest level since July 2008.

A slew of other U.S. economic data greeted investors. U.S. wholesale prices rose slightly in November due to higher food costs, but the underlying rate of increase in producer prices remained tame, indicating little inflation pressure, while the U.S. current account deficit narrowed in the third quarter.

U.S. industrial production fell for the first time in seven months during November, an unexpected drop caused by declining output of cars, electronics, clothing, and other products.

At the MCX, gold prices for February delivery closed lower by Rs 652 (2.3%) at Rs 27,531 per ten grams. Prices rose to a high of Rs 28,060 per 10 grams and fell to a low of Rs 27,287 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed lower by Rs 728 (1.4%) at Rs 53,604/Kg. Prices opened at Rs 54,248/kg and fell to a low of Rs 52,316/Kg during the day's trading.