Precious metals turn little pale

Dollar turns strong following Fed Chairman's testimony

Precious metal prices ended lower on Tuesday, 21 July, 2009. Prices dropped today as the dollar strengthened today following Fed Chairman Ben Bernanke's testimony to the Congress.

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.

On Tuesday, gold for August delivery ended at $946.9, lower by $1.9 (0.2%) an ounce on the New York Mercantile Exchange. Earlier it reached a high of $953.8. Last week, gold ended higher by 2.7%. Year to date, gold prices are higher by 6.7%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Tuesday, Comex silver futures for September delivery fell 14.7 cents (1.1%) at $13.478 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 19.2% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, a six-currency gauge of the greenback's value, rose marginally by 0.1% today as Fed Chairman Ben Bernanke testified before the Congress today.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 19 (0.12%) at Rs 14,869 per 10 grams. Prices rose to a high of Rs 14,898 per 10 grams and fell to a low of Rs 14,832 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 95 (0.42%) lower at Rs 22,178/Kg. Prices opened at Rs 22,320/kg and fell to a low of Rs 22,125/Kg during the day's trading.