Bullion metals turn little pale

Precious metals drop due to strong dollar
Precious metals ended lower on Monday, 11 May, 2009 at Comex. Prices fell today after registering gains last week. Prices fell today due to the relatively strong dollar.
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.
On Monday, Comex Gold for June delivery lost $1.4 (0.2%) to close at $913.5 an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 3%. Year to date, gold prices are higher by 3.4%.
For the month of April, gold lost 3.7%, the second consecutive monthly drop. For the month of March, gold fell 2.1%, down for the first month in five. But the metal gained 4.3% in the first quarter. Before March, for the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (15%) since then.
On Monday, Comex silver futures for July delivery lost 4.5 cents (0.3%) at $13.91 an ounce. Year to date, silver has climbed 17.4% this year. For 2008, silver had lost 24%.
In the currency market on Monday, the greenback regained some strength on Monday, and the dollar index, which weighs the strength of dollar against the basket of six other currencies was up 0.1% at $82.692.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Last year, the weakening dollar and higher global demand for raw materials had led to records for commodities including gold. Gold reached a record in March 2008 as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the last move, the Federal Reserve has cuts its target bank lending rate to 0.25% from 5.25% in September, 2007. The Fed did it in nine steps.
Prior to 2008, 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%.
At the MCX, gold prices for June delivery closed higher by Rs 64 (0.44%) at Rs 14,570 per 10 grams. Prices rose to a high of Rs 14,613 per 10 grams and fell to a low of Rs 14,482 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed Rs 80 (0.35%) higher at Rs 22,624/Kg. Prices opened at Rs 22,510/kg and rose to a high of Rs 22,740/Kg during the day's trading.