Yellow metal sets new record high

Prices set fresh record prices in multiple currencies

Bullion metal prices shot up on Tuesday, 08 June 2010 at Comex. Concerns regarding global economic health pushed prices higher. US stocks slipped considerably earlier during the day thereby pushing bullion metals higher as they once again showed their resilience to trying times as they are often viewed as better investment alternates.



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. Recently, the embattled euro has played stronger role in moving prices rather than dollar fluctuation. Bullion metals have registered increase in prices despite strong dollar in recent times.

On Tuesday, gold for August delivery ended at $1,243.1 an ounce, higher by $4.8 (0.4%) an ounce on the New York Mercantile Exchange. Gold did trade to a new all time high, at $1254.40 in the overnight session, but quickly pulled back from those levels and never retested them in pit trade. Last week, gold ended higher by 0.3%. Before today, prices had touched an all time high of $1,249.7 on 14 May 2010. Today, once again, it fell a little short of the same.

Gold also has set fresh record prices in euros, the British pound, the Indian rupee, the South African rand and the Chinese yuan, among others.

Gold for June delivery had settled above $1,200 in early December 2009, only to pull back to $1,172 area and dip as much as the $1,050 vicinity in early February 2010. Gold ended May higher by 3%. For the month of April, gold ended higher by 6%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 13.2%.

On Tuesday, July Comex silver futures ended higher by 32 cents (1.7%) at $18.47 an ounce. Last week, silver ended lower by 6%. For May, silver shed 1.1%. For the month of April, silver ended higher by 4.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.5%.

In the currency market on Tuesday, the euro was able to rebound and net a gain of roughly 0.3% at $1.196 after oscillating for most of the session. The dollar index fell marginally today.

U.S. stocks traded in a choppy pattern Tuesday, initially drawing support from comments made late Monday by Federal Reserve chief Ben Bernanke before gains faded into losses. Bernanke said he didn't expect to see a double-dip recession in the U.S. That was tempered, however, by more concerns about Europe's economic health as Fitch Ratings warned that the U.K. faces enormous budget problems. But US stocks managed to recover at the end.

Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.

Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end. Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level.

At the MCX, gold prices for August delivery closed higher by Rs 30 (0.16%) at Rs 18,991 per ten grams. Prices rose to a high of Rs 19,198 per 10 grams and fell to a low of Rs 18,907 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 255 (0.87%) higher at Rs 29,422/Kg. Prices opened at Rs 29,157/kg and rose to a high of Rs 29,563/Kg during the day's trading.