Precious metals turn pale on the first trading day of the week

Prices fail to find support from lower dollar and weak data Bullion metal prices ended lower on Monday, 04 June 2012 at Comex. A lower dollar and weak economic data failed to provide the impetus to the bullions and make them attractive on their safe-haven investment appeal. The market consolidated and saw a downside price correction following big and impressive price gains scored on Friday. Gold for August delivery ended lower by $8.2 or 0.5%, to end at $1,613.9 an ounce on the Comex division of the New York Mercantile Exchange on Monday. During the session, it traded between a high of $1,629.70 and a low of $1,610. On Monday, silver prices for July delivery ended lower by 51 cents or 1.8% at $28.01. For the month of May, silver ended down by 12%. In the currency market on Monday, the U.S. dollar index, which weighs the strength of the dollar against a basket of six currencies fell by 0.3%. The euro gained ground on the dollar on Monday on speculation that European leaders will move to strengthen fiscal union across the shared-currency region. 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 bullions have registered increase in prices despite strong dollar in recent times and vice versa. The market place was uneasy on Monday, but the overall tone was not as bad as many reckoned it could be following Friday's rout of the U.S. stock market after a very weak U.S. jobs report issued Friday morning and with the European Union debt situation still fluid. This will be an extra important trading week for the precious metals and many other markets. There are two key events traders are awaiting this week: A European Central Bank officials meeting on Wednesday and U.S. Federal Reserve Chairman Ben Bernanke's testimony before U.S. lawmakers on Thursday. The market place is wondering if the U.S. and/or EU will hint of further easing of their monetary policies this week, in the wake of their recent weaker U.S. economic data. There is still keen uncertainty regarding the EU, as evidenced by German two-year bonds presently providing negative yields. Among economic data expected at Wall Street on Monday, the Commerce Department reported on Monday that U.S. factory orders fell 0.6% in April. Market had expected orders to rise by 0.1%. At the MCX, gold prices for August delivery closed lower by Rs 181 (0.6%) at Rs 29,918 per ten grams. Prices rose to a high of Rs 30,110 per 10 grams and fell to a low of Rs 29,883 per 10 grams during the day's trading. At the MCX, silver prices for July delivery closed lower by Rs 648 (1.2%) at Rs 53,839/Kg. Prices opened at Rs 54,407/kg and fell to a low of Rs 53,759/Kg during the day's trading.