Gold crosses the 900 mark once again as ECB hints at steady interest rate
Precious metal prices soared today as US stock market made a recovery since the past two days and the dollar slipped against the euro. Rising concerns about growth in the US economy had pressured bullion metals since the past couple of days. Silver prices also gained today.
Gold generally moves in the opposite direction of the U.S. currency. Gold, as a dollar-denominated commodity, suffers from dollar strength.
Comex Gold for February delivery rose $22.7 (2.6%) to close at $905.8 an ounce on the New York Mercantile Exchange. Earlier in the day, it hit an intraday price of $8911 an ounce. Prior to today, gold prices had reached a record $916.10 on 15 January. This year, prices have gained 8.5% till date. Last week, gold suffered a loss of 1.8%.
Comex Silver futures for March delivery rose 36.3 cents (2.3%) to $16.333 an ounce. Silver has gained 10% in 2008. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.
Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Rising crude increases inflationary pressures and vice versa. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
Gold witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
In the currency markets today, the dollar was down against most major counterparts, pressured by weaker-than-expected existing-home sales data. The dollar was mainly down against the euro. The dollar index, which tracks the performance of the greenback against six other major currencies, dropped 0.9% at 75.685. On the other hand, European Central Bank officials signaled interest rates would remain steady to cap inflation.
In the energy market today, crude oil rose by more than $2 after the Bush Administration came out with a stimulus package to ward off recession.
Earlier this week, Federal Reserve slashed its benchmark interest rate 0.75% to 3.5% after global equity markets tumbled on concern the slumping U.S. economy will drag down the growth rates of other nations. Federal Reserve's decision came as a surprise to everyone but Fed took the same as stocks markets worldwide, had been plunging on fear that US economy would be hitting a recession soon.
Gold had climbed 31% in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. The Fed reduced federal funds rate three times in FY 2007.
At the MCX, gold prices for February delivery closed higher by Rs 224 (1.9%) at Rs 11,484 per 10 grams. Prices rose to a high of Rs 11,517 per 10 grams and fell to a low of Rs 11,275 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 330 (1.6%) higher at Rs 21,017/Kg. Prices opened at Rs 20,775/kg and rose to a high of Rs 21,210/Kg during the day's trading.
Precious metal prices soared today as US stock market made a recovery since the past two days and the dollar slipped against the euro. Rising concerns about growth in the US economy had pressured bullion metals since the past couple of days. Silver prices also gained today.
Gold generally moves in the opposite direction of the U.S. currency. Gold, as a dollar-denominated commodity, suffers from dollar strength.
Comex Gold for February delivery rose $22.7 (2.6%) to close at $905.8 an ounce on the New York Mercantile Exchange. Earlier in the day, it hit an intraday price of $8911 an ounce. Prior to today, gold prices had reached a record $916.10 on 15 January. This year, prices have gained 8.5% till date. Last week, gold suffered a loss of 1.8%.
Comex Silver futures for March delivery rose 36.3 cents (2.3%) to $16.333 an ounce. Silver has gained 10% in 2008. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.
Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Rising crude increases inflationary pressures and vice versa. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
Gold witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
In the currency markets today, the dollar was down against most major counterparts, pressured by weaker-than-expected existing-home sales data. The dollar was mainly down against the euro. The dollar index, which tracks the performance of the greenback against six other major currencies, dropped 0.9% at 75.685. On the other hand, European Central Bank officials signaled interest rates would remain steady to cap inflation.
In the energy market today, crude oil rose by more than $2 after the Bush Administration came out with a stimulus package to ward off recession.
Earlier this week, Federal Reserve slashed its benchmark interest rate 0.75% to 3.5% after global equity markets tumbled on concern the slumping U.S. economy will drag down the growth rates of other nations. Federal Reserve's decision came as a surprise to everyone but Fed took the same as stocks markets worldwide, had been plunging on fear that US economy would be hitting a recession soon.
Gold had climbed 31% in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. The Fed reduced federal funds rate three times in FY 2007.
At the MCX, gold prices for February delivery closed higher by Rs 224 (1.9%) at Rs 11,484 per 10 grams. Prices rose to a high of Rs 11,517 per 10 grams and fell to a low of Rs 11,275 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 330 (1.6%) higher at Rs 21,017/Kg. Prices opened at Rs 20,775/kg and rose to a high of Rs 21,210/Kg during the day's trading.
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