Gold and silver prices rise as crude oil touches a new record high
Bullion metals rose for the second straight day today, Tuesday, 15 April, 2008 after energy cost rose to a new all time high. Rising energy cost affects prices of bullion metals as a hedge against inflation. Silver prices also rose for the day. Dollar on the other hand rose up marginally.
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. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.
Comex Gold for June delivery today rose $3.3 (0.4%) to close at $932 ounce on the New York Mercantile Exchange. Prices reached a high of $939.8 during intra day trading today. Last week, gold prices gained 1.4% ($13.8) to end at $927. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce.
This year, gold prices have gained 11.5% for the till date against a 8.2% drop for the dollar against the euro. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.