Prices of precious metals slide

Prices of precious metals yesterday dropped in London and New York, as the dollar"s increasing strength puts it on an upward trend.

After two days of appreciation, the price of gold for immediate delivery dropped 0.2% on the Precious Metals Exchange of London, to 1,111.82 dollars/ounce. During the first half of the day, when the dollar was on a downward trend, the price had gone up to 1,125.10 dollars/ounce. On the Comex division of the New York Mercantile Exchange, the price of gold deliverable in April dropped 0.4% at 8:28 a.m. local time, to 1,113.20 dollars an ounce.

However, analysts say that the uptrend in gold will continue due to physical demand. Bullion will average $1,135 an ounce this year, up from a previous forecast of $1,050, UBS AG said in a report yesterday.

Newmont Mining Corp, the world"s second-largest gold producer by sales, reaffirmed its forecast for gold prices to rise to $1,350 an ounce by the end of 2010.

Gold futures climbed for a ninth year in 2009, reaching a record $1,227.50 an ounce on Dec. 3 as the dollar slumped on record-low interest rates and a surge in government stimulus spending.

Silver for March delivery in New York fell 1 percent to $16.58. Platinum for April delivery lost 0.6 percent to $1,570 an ounce and palladium for March delivery slipped 0.6 percent to $442 an ounce.

Analyst expect the price of platinum and palladium, which are mainly used in automotive pollution-control devices and jewelry, to continue to rise. Vehicle sales in the U.S. rose 6.3 percent in January, Autodata Corp. said yesterday.