Gold for February delivery fell $25.3 (1.5%) to settle at $1,695.8 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. It hit a low of $1,692.6 during intra day trading. Prices shed 2.3% last week.
On Tuesday, March silver fell 95 cents, or 2.8%, to settle at $32.81 an ounce. Prices shed 2.5% last week.
The U.S. dollar index was solidly lower once again on Tuesday and hit another fresh six-week low. The dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.3% on Tuesday.
In overnight news, the Euro currency hit a fresh six-month high against the U.S. dollar and European stocks gained amid ideas the European Union sovereign debt crisis has at least stabilized at present. Traders and investors in Europe welcomed the move by Greece on Monday to buy back up to 10 billion Euros of its outstanding bonds at a price from 30 to 40 cents on the dollar. Spanish and Italian bond yields have declined this week, which also suggests a stabilizing overall EU debt crisis.
In the U.S, the focus of the market place remains on the "fiscal cliff" tax increases and spending cuts that is fast approaching. U.S. lawmakers are still jousting on the matter, with the market place now paying less attention to the politicians' rhetoric. While the market place presently perceives there will be a last-minute agreement among U.S. lawmakers to avoid the fiscal cliff, the overall situation has been a bearish drag on many markets, including the raw commodities and stock markets.
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.
At the MCX, gold prices for February delivery closed lower by Rs 336 (1.05%) at Rs 31,366 per ten grams. Prices rose to a high of Rs 31,790 per 10 grams and fell to a low of Rs 31,345 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed lower by Rs 1,330 (2.1%) at Rs 62,505/Kg. Prices opened at Rs 63,771/kg and fell to a low of Rs 62,425/Kg during the day's trading.
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