Precious Metals Jump Down For A Second Time - July 13, 2009

Precious metal prices fell on Friday, 10 July, 2009. Prices fell in synchronization with crude price and strong dollar. 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 Friday, gold for August delivery ended at $912.5, lower by $3.7 (0.4%) an ounce on the New York Mercantile Exchange. For the week, gold ended lower by 1.6%. Year to date, gold prices are higher by 3.4%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (12%) since then.

On Friday, Comex silver futures for September delivery lost 29 cents (2.2%) at $12.645 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 12.8% this year. For 2008, silver had lost 24%.

Crude oil has lost about 10% this week as a new report from the International Energy Agency reaffirmed concerns about weak demand. The dollar was higher against most of its major rivals.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year. At the MCX, gold prices for August delivery closed higher by Rs 5 (0.03%) at Rs 14,500 per 10 grams.

Prices rose to a high of Rs 14,504 per 10 grams and fell to a low of Rs 14,487 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 7 (0.03%) higher at Rs 21,263/Kg. Prices opened at Rs 21,247/kg and rose to a high of Rs 21,279/Kg during the day's trading.

Bad Effect Of Record Crude Oil Price - Aug 01 , 2008

The ill effect of record crude oil price and inflation is finally showing up on India''s economic growth story. The RBI has now climbed down from an earlier projection of 8.5% and says the economy will grow only at 8% for the year 2008-09.

There is more to worry about. RBI says the growth is slower than anticipated in industrial and services sector and this is likely to persist in the short-term. Meanwhile leading brokerage houses have cut India''s growth story even further. Lehman Brothers sees GDP growth slowing to 7.3% in FY09 and UBS have already downgraded the GDP forecast to 7.1% from 7.7%.

But the RBI says the challenging global environment is a bigger source of worry, as record fuel prices continue to strain the government''s fiscal position. The central bank also has a word of caution over the outgo on subsidies and farm waivers, and has in fact called for close monitoring on government''s fiscal situation.

India''s Economy Maintains 9% Growth

India''s economy grew by nine percent last year making it the world''s fastest-growing major economy after China. But the news is not all good. There are worries that high crude oil prices and runaway inflation will slow down growth. Anjana Pasricha has a report from New Delhi. India has pegged economic growth in the last fiscal year at a higher-than expected nine per cent. It is the third successive year that the economy has grown at this pace.The numbers should have brought cheer to the government. But Indian officials are not celebrating as they battle two emerging concerns, high global crude oil prices and rising inflation. Record high crude oil prices are hurting India significantly because it imports about 70 percent of its needs. The government heavily subsidizes prices of petroleum products. But public sector oil companies are now reeling under losses, and have warned they could face a cash crunch if retail prices are not raised.The government is likely to raise prices of gasoline soon, but there are concerns that the move will fuel inflation, which is already running high.India''s inflation rate surpassed eight percent last week, its highest level in four years.