Precious metals end substantially higher

Weakening state of the U.S. dollar index help them rise

Bullion metal prices ended substantially higher on Monday, 22 July 2013 at Comex. Gold prices were boosted by heavy short covering and crossed four-week highs today. The weakening state of the U.S. dollar index has also been bullish for the precious metals just recently

Gold for August delivery ended higher by $43.1 (3.3%) at $1,336 an ounce on the Comex division of the New York Mercantile Exchange on Monday.

September silver ended higher by $1.05 (5.4%) at $20.51 an ounce on Monday.

The commodity markets also saw some buying support coming from last Friday's move by China's central bank to lower the interest rate floor on China's banks' lending rates. Just a few weeks ago a liquidity crunch in China's banking system spooked the world market place.

The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.3% on Monday.

Among economic data expected at Wall Street today, June existing home sales fell 1.2% from a downwardly revised 5.14 million in May to 5.08 million. The consensus expected existing home sales to increase to 5.28 million. The drop in home sales does not bode well for the future. It was expected that rising mortgage rates would accelerate demand in the near term as potential buyers aimed to lock in mortgages before rates went even higher. That was supposed to pull sales forward into May, June and July, before a payback period developed in the future. However, that surge has not materialized in the June report.

At the MCX, gold prices for August delivery closed higher by Rs 855 (3.2%) at Rs 27,560 per ten grams. Prices rose to a high of Rs 27,620 per 10 grams and fell to a low of Rs 26,786 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed higher by Rs 1880 (4.65%) at Rs 42,234/Kg. Prices opened at Rs 40,449/Kg and rose to a high of Rs 42,444/Kg during the day's trading.

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