Bullions end their three-day losing streak

Prices rise amid growing uncertainty surrounding Greece's debt and Fed's GDP outlook

Precious metals ended their three-day losing streak and ended higher for first time in four sessions on Wednesday, 02 November 2011 at Comex. Prices went up after Federal Reserve left rates unchanged and noted continued downside risks to the economy. Growing uncertainty surrounding Greece's debt crisis also helped the bullion market score its first gain in four sessions.



Gold for December delivery ended higher by $17.8 or 1%, to end at $1,729.6 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. Prices rose to a high of $1,745.6 during intra day trading. Prices had shed more than 2% in the past three sessions. Last week, gold gained 6.8%. For the month of October, gold gained 6.3%. It registered a rise of 8% for the third quarter ending September.

On Wednesday, silver prices for December delivery added $1.21 or 3.7% to end at $33.94. Last week, silver gained 13%. For the month of October, silver gained 14%. It registered a drop of 14% for the third quarter ending September.

In the currency market on Wednesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies fell by almost 0.2% after dropping 0.5% earlier.

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. But bullion metals have registered increase in prices despite strong dollar in recent times and vice versa.

The Fed cut its growth outlook sharply for this year, 2012 and 2013. Ben Bernanke also said the Fed is prepared to engage in further accommodation. The Fed's board members and presidents now see 2011 gross domestic product between 1.6% and 1.7%, 2012 GDP between 2.5% and 2.9%, 2013 GDP between 3% and 3.5% and 2014 GDP between 3% and 3.9%.

At the MCX, gold prices for December delivery closed higher by Rs 65 (0.23%) at Rs 27,590 per ten grams. Prices rose to a high of Rs 27,777 per 10 grams and fell to a low of Rs 27,490 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed higher by Rs 795 (1.4%) at Rs 56,108/Kg. Prices opened at Rs 55,475/kg and rose to a high of Rs 56,549/Kg during the day's trading.