Bullion metals shed glaze

Prices drop on demand concerns from China
Precious metal prices ended lower on Wednesday, 27 January 2010. Prices dropped due to impending worries from China front where tightening monetary policies are bothering investors due to shaky demand of metals in coming months.
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 Wednesday, gold for April delivery ended at $1,085.7 an ounce, lower by $13.8 (1.3%) an ounce on the New York Mercantile Exchange. Last week, prices ended lower by 2.4%. Year to date in FY 2010, gold prices are lower by 0.8%.
Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end.
On Wednesday, March Comex silver futures ended lower by 42 cents (2.5%) at $16.44 an ounce. Last week, silver ended lower by 8.1%. Year to date in FY 2010, silver has dropped by almost 2.2%.
Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level.
The Federal Reserve's statement on U.S. monetary policy came out in the noon hours today. After that, gold traded electronically stuck near its floor trading close. The central bank, as expected, kept its federal-funds rate unchanged on Wednesday and said it would keep them exceptionally low for an extended period.
In the currency market on Wednesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose marginally. The dollar gained almost 0.4% against the euro.
Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.
At the MCX, gold prices for February delivery closed lower by Rs 22 (0.13%) at Rs 16,441 per ten grams. Prices rose to a high of Rs 16,558 per 10 grams and fell to a low of Rs 16,422 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 742 (2.8%) lower at Rs 26,071/Kg. Prices opened at Rs 26,751/kg and fell to a low of Rs 26,020/Kg during the day's trading.