Bullions glitter

Gold for February delivery rose $8.4 (0.5%) to settle at $1,721.1 an ounce on the Comex division of the New York Mercantile Exchange on Monday. Prices shed 2.3% last week.

On Monday, March silver rose 48 cents, or 1.4%, to settle at $33.76 an ounce. Prices shed 2.5% last week.

The rhetoric continued among U.S. lawmakers and President Obama regarding the so-called "fiscal cliff" tax increases and spending cuts that are approaching. Traders and investors are more keenly focused on the negotiations among U.S. lawmakers and President Obama regarding the so-called "fiscal cliff" tax increases and spending cuts that are approaching.

The U.S. dollar index was solidly lower on Monday and hit another fresh four-week low. The dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.27% on Monday.

Euro zone finance ministers met again on Monday to further discuss details of Greece's latest bailout plan. Germany on Friday approved a fresh bailout package for Greece. The European markets and raw commodities were also lifted on an improving Euro zone purchasing managers index, although the PMI still showed an overall contraction in November.

Meantime, the raw commodity markets were also cheered by news that China's manufacturing PMI rose to a seven-month high in November. Other Asian countries also posted improving PMI manufacturing numbers on Monday.

In the U.S, the focus of the market place remains on the "fiscal cliff" that is fast approaching. U.S. lawmakers are still jousting on the matter, with not much new on Monday. The market place presently perceives there will be a last-minute agreement among U.S. lawmakers to avoid the fiscal cliff.

The market place is starting to look ahead to next week's last Federal Reserve FOMC meeting of the year, on December 10 and 11. The "Operation Twist" program ends and the FOMC members must decide whether to extend the bond-buying program. Many believe the Fed will continue to purchase U.S. Treasuries and implement "QE4" at next week's meeting. That would be raw-commodity market bullish, including bullish for the precious metals markets.

The Euro currency, European stocks and the raw commodity markets were given a mild boost on Monday when Greece announced overnight it would buy back up to 10 billion Euros of its outstanding bonds at a price from 30 to 40 cents on the dollar. Other European investors snapped up German government short-term debt offered on Monday at a negative return, another sign of the bad economic and financial situation still overhanging the EU. The dour financial situation in the European Union remains a major bullish underlying factor for the safe-haven gold market.

Among economic data expected at Wall Street, the October construction spending rose by 1.4% month-over-month, against the expected increase of 0.4%.

Separately, data showed that business among manufacturers contracted in November and fell to the lowest level in more than three years. The Institute for Supply Management's index of purchasing managers dropped to 49.5% from 51.7% in October. Purchasing managers are the executives who buy raw materials and other supplies for their companies, an activity that tracks closely with how fast the U.S. economy is growing. The ISM report fell short of Wall Street expectations. Market had forecast the index to hold steady at 51.7% in November.

At the MCX, gold prices for February delivery closed higher by Rs 139 (0.44%) at Rs 31,702 per ten grams. Prices rose to a high of Rs 31,767 per 10 grams and fell to a low of Rs 31,560 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed higher by Rs 484 (0.8%) at Rs 63,835/Kg. Prices opened at Rs 63,450/kg and rose to a high of Rs 64,148/Kg during the day's trading.

Powered by Capital Market - Live News