End of gold's winning streak

Yellow metal price drops after nine consecutive sessions of rally

Yellow metal prices ended their nine day consecutive winning streak and ended lower on Friday, 27 November, 2009. Prices fell as the debt concerns in Dubai further troubled investors. The rising dollar also pressured the precious metal prices. Silver prices also ended substantially lower.

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 Friday, gold for December delivery ended at $1,174.2, lower by $12.8 (1.1%) an ounce on the New York Mercantile Exchange. Earlier during the day, it rose to a high of $1,195 and also fell to a low of $1,130. In the previous nine sessions, gold gained more than 7%. For the week, gold gained 2.6%. On a year to date basis, gold price is higher by 33%.

On Friday, December Comex silver futures ended lower by 46.6 cents (2.5%) at $18.302 an ounce. Silver posted a marginal weekly loss.

In the currency market on Friday, the dollar headed up against most of the major currencies. The dollar index, which measures the strength of dollar against basket of six other currencies, rose by almost 0.2%.

Dubai World, the largest corporate entity in the Persian Gulf emirate, asked creditors last Wednesday for a six-month stay on repayment of $60 billion in debts.

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