Gold And Silver Prices Fall Sharply On Profit Taking - Traded Volume On DGCX Soars To Its Highest Ever Level

DGCX today recorded its highest ever volumes since inception - surpassing the earlier record of 4521 contracts registered on April 7th 2006. A total of 4956 contracts were traded today amidst a sharp correction in the prices. The precious metal prices finally broke their winning streak as they fell sharply today on profit taking. The pull back came later in the day after Gold prices registered yet another new 25-year peak. Silver prices also touched their highest levels after 1981 before falling sharply by over 12.5% and erasing their gains of previous six sessions. The pull back came after nine days of continuous rise.

Volumes in Gold futures contracts were highest ever since inception registering 3436 contracts as against previous high 3082 contracts. DGCX June 2006 maturity series accounted for 3316 contracts while the remaining 120 traded contracts were of August 2006 expiry series. The open interest for June 2006 maturity contract shrunk by nearly 45% and closed the day at 452.

Trading began on a firm note as, DGCX June 2006 gold futures contract opened the day higher at $642/ troy oz – registering a huge gap of over $6/- troy oz as compared to yesterday’s closing price. Shortly thereafter, prices scaled to a session high of $649.10/ troy oz to establish a new 25-year peak. Weakness set in on profit taking as the session progressed and towards the evening prices plunged sharply to a low of $615.40/ troy oz. A recovery towards end of the session helped prices close at $622.90/ troy oz – registering a net loss of $12.30 troy oz.

Silver prices finally broke their 9-day winning run. The prices fell by over 12.5% or $1.84/ troy oz during the day wiping out entire gains made over the last six sessions. The price for DGCX July 2006 maturity silver futures contract opened strong at $14.600/ troy oz and jumped to $14.820/ troy oz – its highest levels after 1981. A big sell-off followed in the evening sending the prices crashing down to a low of $12.580/ troy oz. The prices hit the lower limit initially and then followed it up by another hit to the revised lower limit. A small recovery towards the final stages of the session led prices to close at $12.735/ troy oz.

DGCX July 2006 expiry silver contract registered a traded volume of 1520 contracts in today’s session. The open interest in this series descended by over 13% or 62 contracts and stood at 408.

In view of the sharp rise in gold and silver prices over the past few weeks, DGCX has decided to hike the initial margin on gold futures contract from $ 480 to $650 per contract and on silver futures contract from $600 to $750 per contract. The changes will take effect from April 21, 2006.