Bullion metals end higher

Gold stays steady while silver sparkles

Bullion metal prices ended mostly higher on Wednesday, 21 July 2010 at Comex. Gold prices remained almost unchanged while silver prices rose. Prices rose and closed for the day just minutes ahead of Fed chairman Ben Bernanke's semi annual comments on the US economy. Gold investors were also waiting to hear the results of European banks' stress tests to be released on Friday.



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 and vice versa.

On Wednesday, gold for August delivery ended at $1,191.8 an ounce, higher by a dime an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.7%.

Gold ended the month of June higher by 2.5%. For the second quarter, gold ended up by 12%, its seventh consecutive quarterly gain. For the first quarter of this year, gold rose by 1.7%. On a year to date basis, gold is higher by 9.8%.

On Wednesday, September Comex silver futures ended higher by 11 cents (0.6%) at $17.8 an ounce. Last week, silver ended lower by 1.6%. For the second quarter, silver ended higher by 3.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 5.5%.

Fed Chairman Bernanke, made his semiannual monetary policy report to the Senate Banking Committee this afternoon. Bernanke spoke of continued uncertainty in the economy and made note of the Fed's preparations to take more policy actions as needed.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.6%.

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 25 (0.14%) at Rs 18,3364 per ten grams. Prices rose to a high of Rs 18,399 per 10 grams and fell to a low of Rs 18,312 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 167 (0.6%) higher at Rs 28,797/Kg. Prices opened at Rs 28,620/kg and rose to a high of Rs 28,840/Kg during the day's trading.