Gold and silver metals attract buyers despite a strong dollar
It seems bullion metals are done with their losses. Gold and silver prices rose today, Wednesday, 13 August, 2008 despite a strong dollar. Before today, gold and silver prices had registered losses in all the trading sessions in the current month of August, 2008 and had shed 12% in this month. Bullion metals had also incurred sufficient losses last week. Silver prices also fell for the day.
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. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies. 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 and vice versa.
Comex Gold for December delivery rose $16.9 (2.1%) to close at $831.5 ounce on the New York Mercantile Exchange. With today's rise, it lost 9.6% in August, 2008 till date. Last week, it ended lower by 5.8%. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped 20% since then.
This year, gold prices have lost 0.8% till date as the dollar rallied against the euro. It has lost almost $91 in August till now. Gold ended July, 2008 lower by $11 (1.1%).
Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. It ended June, 2008 with a gain of 4.1%. In May, it ended with a gain of higher by $22.5 (2.5%). Before May, in April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.
On Wednesday, Comex silver futures for September delivery rose 36 cents (2.5%) to $14.845 an ounce. With today's drop silver has lost almost 0.5% in 2008 till date. Last week it lost 12.5%. It ended July 2008 with a gain of 3%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. The metal also had gained for seven straight years.
At the currency markets on Wednesday, the U.S. dollar hit the highest since at least March vs. the euro and other major currencies after a report showed U.S. retail sales fell less than forecast in July. The dollar index, which measures the greenback against a basket of currencies, rose to 76.24 from 76.13 in the previous day. The high for the index Wednesday was 76.52.
In economic news today, the Commerce Department said purchases at retailers declined 0.1% last month. Excluding automobiles, sales rose 0.4% last month. Separately, the Labor Department said import prices rose 1.7% in June, compared with a 1% gain forecast.
At the crude market on Wednesday, crude oil futures rose more than $2 a barrel after a U.S. Energy Department report showed a bigger- than-forecast decline in inventories of gasoline as refiners shut units and imports fell. Crude oil for September delivery rose $2.99 (2.6%) to settle at $116 a barrel.
Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. The Federal Reserve halted cuts to its target bank lending rate in April, after slicing it in seven steps to 2% from 5.25% in September.
Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
It seems bullion metals are done with their losses. Gold and silver prices rose today, Wednesday, 13 August, 2008 despite a strong dollar. Before today, gold and silver prices had registered losses in all the trading sessions in the current month of August, 2008 and had shed 12% in this month. Bullion metals had also incurred sufficient losses last week. Silver prices also fell for the day.
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. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies. 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 and vice versa.
Comex Gold for December delivery rose $16.9 (2.1%) to close at $831.5 ounce on the New York Mercantile Exchange. With today's rise, it lost 9.6% in August, 2008 till date. Last week, it ended lower by 5.8%. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped 20% since then.
This year, gold prices have lost 0.8% till date as the dollar rallied against the euro. It has lost almost $91 in August till now. Gold ended July, 2008 lower by $11 (1.1%).
Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. It ended June, 2008 with a gain of 4.1%. In May, it ended with a gain of higher by $22.5 (2.5%). Before May, in April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.
On Wednesday, Comex silver futures for September delivery rose 36 cents (2.5%) to $14.845 an ounce. With today's drop silver has lost almost 0.5% in 2008 till date. Last week it lost 12.5%. It ended July 2008 with a gain of 3%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. The metal also had gained for seven straight years.
At the currency markets on Wednesday, the U.S. dollar hit the highest since at least March vs. the euro and other major currencies after a report showed U.S. retail sales fell less than forecast in July. The dollar index, which measures the greenback against a basket of currencies, rose to 76.24 from 76.13 in the previous day. The high for the index Wednesday was 76.52.
In economic news today, the Commerce Department said purchases at retailers declined 0.1% last month. Excluding automobiles, sales rose 0.4% last month. Separately, the Labor Department said import prices rose 1.7% in June, compared with a 1% gain forecast.
At the crude market on Wednesday, crude oil futures rose more than $2 a barrel after a U.S. Energy Department report showed a bigger- than-forecast decline in inventories of gasoline as refiners shut units and imports fell. Crude oil for September delivery rose $2.99 (2.6%) to settle at $116 a barrel.
Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. The Federal Reserve halted cuts to its target bank lending rate in April, after slicing it in seven steps to 2% from 5.25% in September.
Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
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