Bullion metals shine for second straight day

Prices rise as housing data pressures dollar
Precious metal prices rose higher for second straight day on Tuesday, 02 February 2010. Prices rose as better than expected housing data in US pressured the dollar.
Prices slipped last week 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 Tuesday, gold for April delivery ended at $1,118 an ounce, higher by $13 (1.2%) an ounce on the New York Mercantile Exchange. Last week, gold lost 0.6%. For January 2010, gold lost 1.2%. Year to date, gold has gained 1.9%.
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 Tuesday, March Comex silver futures ended higher by 8 cents (0.48%) at $16.74 an ounce. Last week, silver ended lower by 4.3%. In January 2010, silver shed 3.9%. Year to date in FY 2010, silver has dropped by almost 0.5%.
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.
Among economic data expected for the day, The National Association of Realtors reported on Tuesday, 2 February 2010 that pending home sales in US rose in December 2009 after the federal tax credit was reinstated.
As per the report, the pending home sales index rose 1% in December after plunging 16.4% in November, with buyers reacting first to the expiration and then to the return of the tax credit. The index was up 10.9% compared with December 2008. In December, existing-home sales fell 16.7%.
Separately, the Commerce Department reported on Tuesday, 2 February 2010 that housing vacancies remained near record levels in the fourth quarter with 2.1 million vacant homes for sale and 4.5 million for rent. Of all housing units built since 2000, 21% were vacant.
In the currency market on Tuesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.3%.
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 April delivery closed higher by Rs 134 (0.85%) at Rs 16,754 per ten grams. Prices rose to a high of Rs 16,789 per 10 grams and fell to a low of Rs 16,562 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 7 (0.02%) lower at Rs 26,061/Kg. Prices opened at Rs 26,051/kg and fell to a low of Rs 25,952/Kg during the day's trading.