Search Now

Recommendations

Wednesday, October 07, 2009

Gold settles at record high


Weak dollar spikes up commodity prices

Precious metal prices ended higher for third straight day on Tuesday, 06 October, 2009. Prices rose as dollar fell to fresh lows once again today following hike in interest rate by Australia. Gold touched fresh highs today.

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 December delivery ended at $1,039.7, higher by $21.9 (2.2%) an ounce on the New York Mercantile Exchange. During intra day trading, gold rose to a high of $1,045 crossing the earlier all time high of $1035 reached. Last week, gold ended higher by 1.3%. Year to date, gold prices are higher by 17.5%.

Gold ended September, 2009 higher by 5.9%. For the third quarter it ended higher by 8.7%. Before this, 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 (2.5%) since then.

On Tuesday, Comex silver futures for December delivery rose 30.5 cents (1.9%) to $16.535 an ounce.

Silver ended 11.8% higher for September, 2009. Year to date, silver has climbed 49.3% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.6%. The dollar also fell after the Reserve Bank of Australia boosted its cash rate by a quarter of a percentage point to 3.25%, marking the first hike since March 2008.

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

At the MCX, gold prices for December delivery closed higher by Rs 109 (0.7%) at Rs 15,768 per 10 grams. Prices rose to a high of Rs 15,810 per 10 grams and fell to a low of Rs 15,612 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 543 (2.1%) higher at Rs 26,855/Kg. Prices opened at Rs 26,345/kg and rose to a high of Rs 26,980/Kg during the day's trading.