Apr-30-2011

In-demand silver all set to soar

(topic overview)
CONTENTS:

Demand for platinum group metals will continue to outstrip supplies as long as the auto industry uses catalytic converters, Jack Lifton, founding principal of Technology Metals Research LLC, said today at the Bloomberg Link Precious Metals conference in New York. (More...)
The dollar fell beyond $1.48 per euro for the first time since December 2009 after the Fed'''s pledge. (More...)
Gold in particular was seen as a safe commodity in a troubled economic and political situation and it had been breaking all previous records in recent weeks as the global inflation presented a jump. (More...)
Former Fed Chairman Paul Volcker ended gold'''s rally to a then-record $873 by raising borrowing costs to 20% in March 1980. (More...)
Gold notched a record high above $1,569 per troy ounce, rising 4.1 per cent on the week. (More...)
Silver may drop in the short term after the metal'''s ratio to gold was '''overextended''' and prices touched a record in London, Standard Chartered Plc said. (More...)
With the dollar under pressure and its inverse link to gold strengthening for the first time in a week, the bullion price was set for a second day of gains, although a string of public holidays in the United Kingdom restricted volumes. (More...)
'''Until monetary policy changes, you'''re going to continue to see gold go up,''' said Michael Cuggino, who helps manage $12 billion at Permanent Portfolio Funds in San Francisco. (More...)
Today, the Dollar is falling again with the PowerShares DB U.S. Dollar Index Bullish (NYSE:UUP) trading at $20.97, -0.05 (-0.24%). (More...)
The Fed offered no surprises with its latest FOMC rate decision and gold and silver were rising as a result. (More...)
There is also genuine end-user interest: Indian consumers, priced out by the rally in gold, are increasingly turning to silver. (More...)
The deposits rebounded in February after falling for the fourth consecutive month in January. (More...)
Wheat futures for May on the Chicago Board of Trade soft settled down 34-1/4 cents at $7.77 a bushel. (More...)
Due to the tsunami attack that struck Japan back in mid March, it could be that the low correlation of gold and Yen have something to do with the decline in Japan's role in the gold and silver market. (More...)
Silver surged 3.4% yesterday to settle at a 31-year nominal high, and rose by $1.55 on the day. (More...)
With the 3,400-tonne rise in LME copper inventories on Tuesday, stocks have risen in 13 of the last 15 sessions. (More...)
Palladium was little changed at $768.75 an ounce, while platinum fell 0.3 percent to $1,821 an ounce. (More...)
Admire it or stick it in a vault as a store of value and there's not much else you can do with it. (More...)
One would want to look at worldwide monetary policy, which is not nearly as stimulative as U.S. policy. (More...)

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Demand for platinum group metals will continue to outstrip supplies as long as the auto industry uses catalytic converters, Jack Lifton, founding principal of Technology Metals Research LLC, said today at the Bloomberg Link Precious Metals conference in New York. Central banks that were net sellers of gold a decade ago are buying the precious metal to reduce their reliance on the dollar as a reserve currency, signaling demand that may extend a record rally in prices. As developing countries accelerate purchases, gold may reach $2,000 an ounce this year, compared with a record of $1,538.80 yesterday in New York, said Robert McEwen, the chief executive officer of producer U.S. Gold Corp. Euro Pacific Capital'''s Michael Pento, who correctly predicted gold'''s highs for the past two years, forecast a 2011 high of $1,600. Prices reached a record 14 times this month on demand from investors seeking an alternative to the dollar after the currency slumped to the lowest since 2009, U.S. debt widened, and the Federal Reserve signaled April 27 that borrowing costs will remain near zero percent for an extended period. ^[1] SYDNEY (Dow Jones)--Precious metals were mixed in cautious Asian trade Wednesday as a change in the U.S. Federal Reserve's post-meeting communications policy, which could reveal new information later in the day about how the U.S. central bank will back out of its $600 billion quantitative easing program, raised uncertainty for investors. Spot gold was down marginally at 0700 GMT at $1,506.90 a troy ounce, off 20 cents from its New York close, but hewing closer to its nine-day moving average. ^[2]

Silver steadied on Wednesday, after its largest one-day slide in over a month the previous day, while gold profited from a weaker dollar which came under pressure ahead of a U.S. Federal Reserve interest rate decision. The Fed is not expected to signal any rush to scale back its multi-billion dollar support mechanisms for the economy, so investors are waiting to hear more on the outlook for monetary policy from chairman Ben Bernanke when he gives the central bank's first post-decision news conference later in the day. ^[3] U.S. silver futures leapt as much as 6 per cent and gold futures reached a record high, underpinned by a weakened dollar after the U.S. Federal Reserve signalled no rush to reverse its accommodative monetary policy. The dollar index, a measure of the greenback's strength against a basket of currencies, declined to a three-year low following Fed chief Ben Bernanke's remarks that the central bank would not scale back its support for the economic recovery any time soon. ^[4]

Silver for May delivery rose 90.8 cents to settle at $45.958 an ounce. While the Fed said it would end its program of buying Treasury bonds on schedule, its policy of supporting the economy through low interest rates prompted traders to buy gold and silver futures as a hedge against inflation, said Carlos Sanchez, an analyst with CPM Group in New York. To nurture the economic recovery, the Fed said Wednesday it will hold its key interest rate at a record low near zero for an "extended period." ^[5] Gold rose Wednesday after the Federal Reserve said it would keep its key interest rate near zero, stoking fears of a weaker dollar and inflation. Gold for June delivery rose $13.60 to settle at $1,517.10 an ounce after the Fed made its announcement and continued rising in after-market trading. ^[5] NEW YORK (Reuters) - Gold rose to an all-time high near $1,530 an ounce on Wednesday and oil also went up after the Federal Reserve vowed to keep U.S. interest rates low for an extended period, which sent the dollar tumbling. ^[6]

Spot gold added 75 cents to $1,535.70 an ounce after hitting a lifetime high around $1,538 an ounce in the previous session. Soaring prices hurt the bottom line of certain manufacturers, including photography company Eastman Kodak, which said on Thursday a hike in raw material costs, particularly silver, led to a decrease in its film business revenue. The dollar wallowed at three-year lows against a basket of currencies early in Asia on Friday and remained on track for its biggest weekly fall in 14 weeks, though selling pressure eased as bears were already very short. Tokyo stocks climbed 1.6 percent on Thursday to their highest since last's month earthquake, helped by better-than-expected domestic earnings and strength in U.S. shares after the Federal Reserve pledged to hold short-term rates near zero. ^[7]

U.S. June gold futures GCM1 settled up 0.9 percent at $1,531.20. Precious metals rose after data showed U.S. economic growth braked sharply in the first quarter as higher food and gasoline prices dampened consumer spending, sending inflation rising at its fastest pace in 2-1/2 years. Adjusted for inflation, however, the current price of silver is about two-thirds below its record at over $130 an ounce, while gold was only a third below a peak of $2,200. Both records were set in 1980. ^[8] Precious metals are wrapping up a historic April that saw gold futures repeatedly set then break record prices while silver futures neared their all-time record price, Bloomberg reports. Both commodities have gained in value largely because of fears of accelerating inflation and the U.S. dollar's downward trend. ^[9] Gold futures Wednesday morning neared record prices set 48 hours prior in anticipation of the U.S. central bank's two day policy meeting, Bloomberg reports. The weakening dollar also is driving the precious metal's value as Wednesday morning it scraped its lowest price in 30 months when held against six counterpart currencies amidst conjecture about future Fed actions once its bond buying policy ends in June. The dollar also plunged to its lowest value against the euro in 16 months. ^[10]

Inflation forecasts were also below the Fed's 2% target, which means the central bank would want more inflation. Some experts are calling this QE 2.5 and say that this leaves the door open to a third round of quantitative easing, or QE3. "Last time gold and silver were making headlines like this, the Volcker Fed actively moved to block speculation in gold and silver futures, hiking interest rates to double-digits to kill the 'inflationary psychology,'" said Adrian Ash, head of research at BullionVault.com. "Whereas yesterday, and keeping rates at zero, the Fed hiked its 2011 upper-inflation forecast to 2.8%, but today's GDP data already put domestic price rises up at 3.4% annualized." This is "adding quite a bit of pressure to the dollar index and investors are going to be searching for those hard assets to protect themselves," says Phil Streible, senior market strategist at Lind-Waldock ^[11] The Fed has said it wants the unemployment rate to fall to 8%, currently at 8.8%, which will be hard to do the more jobless claims rise. Streible says the rally is even stronger because speculators who were washed out in the recent selloff could get back into the market as well as those who missed the rally the first time. His forecast for 2011 is $1,650 for gold and $60 for silver. It's not just the U.S. pushing gold and silver higher. The Bank of Japan left interest rates unchanged at its latest central bank policy meeting and lowered growth forecasts estimating a recession. ^[11] The market spiked, extending morning gains, after Fed ended a two-day policy meeting by saying was in no rush to raise interest rates that have remained near zero to support economic growth. Fed chairman Ben Bernanke later reiterated the central bank's stance in its first post-meeting news conference. James Steel, who follows the gold market for HSBC in New York, said the statements "put the nail in the coffin" to any thoughts investors had of the Fed raising rates soon to control inflation -- its other responsibility. ^[6]

The Fed is expected to indicate that it is in no hurry to raise interest rates, while Chairman Ben Bernanke will deliver the first regularly scheduled post-decision news briefing in the bank's 97-year history. Silver finished down at $44.98 an ounce at 3:20 pm EDT (1920 GMT), compared with $46.90 late in New York on Monday, set for its biggest daily percentage loss since March 15. ^[12]

NEW YORK — Gold rocketed to almost $1,570 an ounce Friday, setting a new dollar-price record as its unabated rise was propelled by extremely low interest rates and the dollar's weakness. ^[13] LONDON, April 28 (Reuters) - Gold hit record highs above $1,530 an ounce on Thursday, driven by the broad weakness in the dollar, which fell after the U.S. Federal Reserve signalled it would keep interest rates low for an extended period. ^[14] Silver ready (.999 fineness) shot up by a hefty Rs 3,975 per kg to finish at Rs 73,105 from overnight closing level of Rs 69,130. In overseas market, gold prices hit record highs today as the dollar fell to a three-year low against a basket of major currencies after the U.S. Federal Reserve's decision to maintain its low interest regime in order to support economic recovery. ^[15] The dollar fell to the lowest since December 2009 against the euro after the Federal Reserve kept borrowing costs at a record low. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, expanded 1.5 per cent this month, heading for the biggest gain since August. Prices reached a record 14 times this month on demand from investors seeking an alternative to the dollar after the currency slumped to the lowest as the U.S. debt widened, and the Federal Reserve signaled that borrowing costs will remain near zero per cent for an extended period. ^[16]

The won is widely expected to be under upward pressure against the dollar, aided by robust exports and sustained inflows of foreign capital. As the dollar has slid against major currencies amid the U.S. Federal Reserve's soft monetary policy, gold has extended its rallies, sending the price of the precious metal above $1,500 per ounce. ^[3] Driving the yellowish metal to the top price of $1,524.20 per troy ounce was the ever weakening dollar, particularly when held against European currencies. To curb inflation, the European Central bank began increasing borrowing rates earlier this month while the U.S. Federal Reserve is believed to be slow to follow suit. ^[17]

Gold futures rose to a record $1,530.30 an ounce on speculation that the Federal Reserve will be slow to raise U.S. borrowing costs, weakening the dollar and boosting the appeal of the metal as an alternative asset. ^[18] Gold futures surged to a record for the second straight day after the U.S. Federal Reserve pledged to keep borrowing costs low, eroding prospects for the dollar and boosting demand for the metal as an alternative investment. ^[19]

Coming up: U.S. personal income on Friday (Adds Kodak quote in paragraph 8) By Frank Tang NEW YORK, April 28 (Reuters) - Silver soared to an all-time high on Thursday and gold rose to another record, as the dollar fell and as signs that the Federal Reserve would maintain a loose monetary policy stoked inflation worries. ^[8] SINGAPORE, April 27 (Reuters) - - Silver prices rebounded on Wednesday from sharp falls in the previous session, and gold edged higher, buoyed by a dollar near 2-1/2-year lows as investors await the outcome of a two-day meeting of the U.S. Federal Reserve for clues to monetary policy. ^[20]

Geopolitical turmoil in the Middle East and Africa continued to add tension to the oil market as traders fretted about loss of supply. Silver posted its largest one-day fall in six weeks on Tuesday after having hit a 31-year high in the previous session, while gold was pressured by investor uncertainty over the likely course of U.S. monetary policy. Spot silver fell by as much as 4.9 per cent to a session low of $44.62 an ounce, after having risen to $49.31 on Monday, its highest since touching $49.48 in January 1980. ^[12] In the past 12 months, silver has surged 169 per cent in U.S. dollars, leaving some 128 per cent in Australian dollars. For all its headline grabbing, gold rose 33 per cent, leaving only an 11 per cent gain in Australian dollars, which, admittedly, still beats almost everything else. What was that about gold's personal best? Well, at more than $US1500 an ounce it's well above its 1980 peak of $US850 an ounce but after inflation it's way off form. ^[21]

GOLD PRICE NEWS ''' The gold price surged to a new record high Friday morning, touching $1,541 per ounce before settling back at $1,538. Strength in the price of gold continues to be driven by the sinking U.S. dollar, which fell against the euro, pound, and Canadian dollar this morning. ^[22] Following the FOMC announcement and Bernanke's press conference on Wednesday, the gold price rallied to yet another new record high of $1,535.10 per ounce.'' The price of gold held onto modest gains near $1,510 prior to the release of the Fed statement, but subsequently charged to a new record high as the Fed reiterated its ultra-dovish outlook. Silver resumed its ascent alongside the gold price following the Fed meeting, surging from near $45 to as high as $48.78 per ounce.'' ^[23] The SPDR Gold Trust (GLD), a proxy for the gold price and the world's largest gold ETF, finished at a new record high of $149.82 per ounce. Silver climbed in concert with the gold price, as it approached $50 per ounce for the second time this week. The price of silver hit an intra-day high of $49.56, before paring its gains and settling at $48.66 per ounce. ^[22]

Gold prices finished at record high levels while silver achieved an all time maximum value and crude oil futures added some points as the dollar shed during the last trading session. The lower value of greenback had made commodities more attractive for the investors as they priced less in dollars for holders of rival currencies, drove the demand up for the raw materials. Though Commodities trading was shortened this week, yet commodities catch investors''' interest as ignited safe heaven concern. ^[24] LONDON — Gold prices nailed fresh record highs, silver struck an all-time peak and crude oil futures climbed as the dollar faltered during a shortened trading week for commodity investors. ^[25]

The traditional supply and demand fundamentals that have determined the gold price in previous decades no longer apply, Barrick Gold chairperson and founder Peter Munk asserted on Wednesday. Gold prices, which reached record highs above $1 520/oz on Wednesday, are being driven by investors looking for security, and looking to protect wealth, he said at the annual shareholders meeting of the world's biggest gold company. Investment demand exceeded jewelry demand for gold in 2010 for the first time, and some analysts have suggested this puts the market in a precarious position, as prices could fall sharply if investor demand growth slowed or reversed. Munk insisted that the old dynamics of physical demand have lost their importance. '''Gold today is no longer related to a normal economic cycle of supply and demand, jewelry and Indian wedding seasons. ''' he said. '''All those things are pass '', forget about them.''' Gold is being driven by '''a fundamental, global and growing insecurity, a fundamental, global and growing lack of confidence of the world in everything they were brought up to believe in'''. All this means that '''gold's future is assured''', Munk said. ^[1]

Gold futures are currently traded on the Comex division of the New York Mercantile Exchange. Immediate-delivery gold soared almost 30% last year and this week reached a record $1,518.32 an ounce, as investors sought to protect their wealth from further currency debasement and accelerating inflation. Chinese demand may advance 15% this year as investors seek a hedge against inflationary pressure, according to the China Gold Association. ^[3] Gold prices will climb to $1,575 an ounce by yearend, Thomas Anderson, the vice president and global head of ETF strategy and research at State Street Global Advisors, said today at the Bloomberg Link Precious Metals Conference in New York. Investors are purchasing the metal for '''wealth preservation''' and to take '''risk out of''' their overall portfolios, Anderson said. ^[1] Gold prices will climb to $1,650 an ounce by yearend, William Rhind, the head of sales and marketing at ETFS Marketing LLC, said today at the Bloomberg Link Precious Metals Conference in New York. ^[1]

Silver prices may climb to $62 an ounce by yearend, Frank McGhee, the head dealer at Integrated Brokerage Services, said today at the Bloomberg Link Precious Metals Conference in New York. The current rally is '''very different''' from the jump in prices in the 1970s, and there is '''no manipulation''' in the market, he said. ^[1]

Holdings of gold in the SPDR Gold Trust ( GLD ) remain unchanged, while holdings of silver in the iShares Silver Trust ( SLV ) fall 3 percent to 355,368,713.8 ounces. Russian precious metals miner Polymetal ( PMTL.MM ) said on Thursday its net income more than doubled to $250 million in 2010, due to a 43 percent increase in gold output, as well as rising gold and silver prices. Aquarius Platinum said attributable production in its third quarter rose 18 percent to 122,213 PGM ounces. The company said the rampup of its Everest project was proceeding as planned as well as the redevelopment of the Blue Ridge facility. ^[14]

"The market is a bit mixed ahead of the Fed meeting, which will influence the move of the dollar and precious metals," said Peter Fung, head of dealing at Wing Fung Precious Metals based in Hong Kong. Silver steadied somewhat, following its largest one-day fall in a month the previous day. The price is on track for a 21% gain this month and a 47-percent rise this year, making it the top performing precious metal. Dealers in Asia said strong physical demand was offering some support to silver, although holdings of silver in the world's largest exchange-traded funds staged their largest one-day outflow in nearly two weeks by April 26. Spot silver XAG= was last flat at $45.48 an ounce, having recovered from a 3-percent drop on Tuesday, its largest one-day slide in six weeks. ^[3] The price of silver remained in sight of record highs thanks to the weakening dollar as well as increased demand in Asia. Earlier this week, the precious metal hit an all-time high of $49.793 and is up almost 60% on a year ago. As the global recovery continues, some analysts expect demand for the metal, which is used in industry such as electronics, to rise further. Others warn the metals high price could come at a cost. "In the long term, I think, if we see silver prices at such a high level, then it could hurt the industrial demand," added Ong Yi Ling. ^[26]

PRECIOUS METALS: Gold struck an all-time peak above $1,538 an ounce as investors continued to scoop up the traditional safe-haven precious metal, while sister metal silver also hit a record high. ^[25] In international markets, Gold today rose to a record high of 1,540.20 dollar an ounce as a weakening dollar and inflation prompted investors to buy precious metals. ^[16] Gold rose to a record in New York as a weakening dollar and inflation prompted investors to buy precious metals. ^[27]

NEW YORK ( TheStreet ) -- Gold prices shot up while silver prices popped Thursday as investors bought the metals against a weak dollar and higher inflation expectations. ^[11]

NEW YORK ( TheStreet ) -- Gold prices settled at a record and silver prices popped after the Federal Reserve confirmed easy cheap money for the medium-term. ^[28] Gold settled at a new record and silver prices rallied Wednesday as the Federal Reserve confirmed that it would maintain an easy money policyfor the medium term. ^[29]

High volatility and the expiry of U.S. silver options added to the intensity of the decline, impacting gold, which fell back from Monday's record of $1,518.10 an ounce ahead of the outcome of the two-day U.S. Federal Reserve policy meeting on Wednesday. ^[12] "I am seeing all types of bullish call buying. They are in the money and far out, including December, March and September calls," said COMEX options floor trader Dominick Cognata. "They are looking to buy cheap call spreads because this thing looks like it may shoot up to to $70 or $80." Gold and silver's rally was supported by follow-up buying after Federal Reserve Chairman Ben Bernanke signaled on Wednesday that the U.S. central bank is in no rush to scale back its support for the economy. ^[8] First quarter GDP grew 1.8%, below the 2.0% the market was expecting, while weekly jobless claims rose to 429,000, below the 390,000 consensus estimate among economists. The disappointing macroeconomic data helped reinforce the views expressed by the Federal Reserve and Chairman Ben Bernanke this week that the U.S. economic recovery remains tenuous and continues to require an ultra-dovish stance from the central bank. Commenting on the Fed's outlook, Michael Gapen, an analyst with Barclays Capital Research, provided an encouraging forecast for those holding investments tied to the gold price. ^[22] The rally in the gold price and sell-off in the dollar was fueled by yesterday's Federal Reserve meeting, along with Fed Chairman Bernanke's dovish commentary at the first-ever post-FOMC press conference. The gold price subsequently held firm this morning after disappointing reports on weekly jobless claims and first quarter GDP.'' ^[23]

The dollar fell beyond $1.48 per euro for the first time since December 2009 after the Fed'''s pledge. The Dollar Index, which tracks its value against six counterparts, declined for an eighth day to the lowest level since July 2008. Gold has gained 7.7 percent this year, extending a decade- long advance, the best run since at least 1920, as the prospect of currency debasement and accelerating inflation fuel investor demand. Fighting in Libya and sovereign-debt turmoil in Europe have also contributed to the rally this year. ^[30] Russia purchased 8 tons of gold in the first quarter. China, which has just 1.6% of its reserves in gold, may invest more than $1 trillion in bullion, Pento said. '''China wants to be an international player, and they need to own more gold than they currently have.''' The U.S. Treasury Department projects the government could reach its debt ceiling of $14.3 trillion as soon as mid-May and run out of options for avoiding default by early July. The Fed has kept its benchmark rate between zero percent and 0.25% since December 2008 to help stimulate the economy, driving the dollar down 11% against a basket of six major currencies during the past year. ^[1]

The Fed has kept rates at ultra-low levels since December 2008. The Fed also said it's continuing a separate support program. It's reinvesting about $17 billion a month in proceeds from its portfolio of mortgage securities to buy Treasury debt. That should help keep rates low on mortgages and other consumer loans. As low interest rates keep money cheap, it is reversing a slump in gold and silver prices from earlier this week. ^[5] The big run-up in gold and silver prices reflected the view of speculators that the U.S. dollar could be attacked without fear that the Fed would abruptly raise interest rates. ^[31]

Neither metal looks all that precious as a hedge against inflation but there's another way of looking at it. Since both used to be currencies - silver even more so than gold, history shows - it's hard to know what is measuring which. Looked at that way, an ounce of gold, which bought 850 U.S. dollars in 1980, would today buy 1500 of them. Either gold is rising in price in its own right or paper money is devaluing. Anyway, it's the fact it has been falling further behind gold for so long that's turned silver around. Why it's been such a laggard is a mystery. ^[21] When you take real current dollars and adjust for inflation, the all-time silver high was about $140 plus. "Gold is certainly much closer to its real high than silver, so if this market is to move, silver will perhaps be more aggressive and outperform gold, and that's exactly what we are seeing." "This is a dollar story. It's not about the euro or the Aussie at $1.09 or gold at $1,534 or silver at a record. It's not about the price of these things. It's just about the dollar being worth less. It has to be worth less for the U.S. to get out of the prolonged slump we are in." ^[32]

NEW YORK (Reuters) - Silver surged nearly 4 percent on Thursday to an all time high at $49.51 an ounce, exceeding the previous record set in 1980 as a dollar drop and gold's record rally unleashed a wave of speculative buying. ^[32] Three predicted lower prices. Gold for June delivery was up 1.8 percent for this week at $1,530.60 an ounce by 12:59 p.m. yesterday on the Comex in New York after climbing to a record $1,538.80 earlier in the day. Assets in the SPDR Gold Trust, the biggest exchange-traded fund in gold, are up 1.5 percent this month, heading for the biggest monthly gain since August. ^[33]

Prices have more than tripled since the SPDR Gold Trust, the biggest ETF backed by bullion, was introduced in November 2004. Central banks in emerging markets may aim to hold 2% to 8% of their foreign-currency reserves in gold, Francisco Blanch, the head of commodities research at Bank of America Merrill Lynch in New York, said in an interview. Gold is '''close to''' its cyclical high, said Blanch, who expects the metal to average $1,500 this year. ^[1] In 2010, central banks became net buyers for the first time in two decades, adding 87 metric tons in official-sector purchases by countries including Bolivia, Sri Lanka and Mauritius, according to World Gold Council data. China, with more than $3 trillion in foreign-currency reserves, plans to set up new funds to invest in precious metals, Century Weekly reported this week. ^[1]

DATA EVENTS (GMT) 1230 U.S. Personal income mm Oct 1355 U.S. U.Mich conditions final Apr 1355 U.S. U.Mich expectation final Apr 1355 U.S. U.Mich sentiment final Apr 1430 U.S. ECRI index Weekly :: U.S. Dallas Fed PCE Mar Precious metals prices 0017 GMT Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 1535.70 0.75 +0.05 8.19 Spot Silver 48.28 -0.13 -0.27 56.45 Spot Platinum 1836.74 1.64 +0.09 3.92 Spot Palladium 782.00 10.77 +1.40 -2.19 TOCOM Gold 4030.00 1.00 +0.02 8.07 17566 TOCOM Platinum 4847.00 31.00 +0.64 3.22 1717 TOCOM Silver 126.10 -0.30 -0.24 55.68 1879 TOCOM Palladium 2021.00 5.00 +0.25 -3.62 154 Euro/Dollar 1.4839 Dollar/Yen 81.57 TOCOM prices in yen per gram. ^[7] DATA/EVENTS :: U.S. Baker Hughes earnings Q1 1100 U.S. Mortgage index Weekly 1130 U.S. Boeing earnings Q1 1230 U.S. ConnocoPhilips earnings Q1 1230 U.S. Durable goods Mar 1630 U.S. FOMC rate decision Mar PRICES Precious metals prices 0033 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1508.96 7.76 +0.52 6.31 Spot Silver 45.96 0.47 +1.03 48.93 Spot Platinum 1812.49 16.34 +0.91 2.55 Spot Palladium 755.72 5.39 +0.72 -5.48 TOCOM Gold 3967.00 9.00 +0.23 6.38 18204 TOCOM Platinum 4801.00 16.00 +0.33 2.24 3119 TOCOM Silver 120.50 -0.10 -0.08 48.77 4062 TOCOM Palladium 1987.00 -1.00 -0.05 -5.25 350 COMEX GOLD JUN1 1510.00 6.50 +0.43 6.23 5114 COMEX SILVER MAY1 46.07 1.02 +2.25 48.88 6108 Euro/Dollar 1.4678 Dollar/Yen 81.48 TOCOM prices in yen per gram. ^[20]

Silver and gold remain very close to nominal highs today as the beleaguered U.S. dollar remains under pressure due to ultra loose U.S. monetary policies, deepening inflationary price pressures and concerns about the feeble economic recovery. Gold has risen 8% this month and silver 28% due to the very poor U.S. monetary and fiscal position, the eurozone debt crisis and in the background the Japanese nuclear crisis, and geopolitical instability in the Africa and the Middle East. This is continuing to lead to diversification into the precious metals. ^[1] "Precious metals prices rebounded sharply on Thursday in light of the weak jobless data and a poor U.S. GDP report. The dollar is not seeing much of a reprieve from its earlier weakness, a signal to bearish investors to get long gold and silver." ^[32]

Roger "Trader Rog" Wiegand, editor of Trader Tracks, had predicted a cyclical high for gold of $1,507/oz. and a yearly high of $1,607/oz. His silver crystal ball shows the metal rising to $45.25/oz., then as high as $51/oz. before people get scared and start getting out, leaving the wise investors to pick up and take it as high as $55.85 this year. "It's all about cycles and time; it's just math," Wiegand said. He didn't think prices would reach these milestones this early in the year. He follows seven indicators and says geopolitical unrest is only one of the factors pushing prices. An emerging trend over the last year, which he predicts will be even more prevalent by fall, is the breaking away of gold and silver shares from the rest of the stock market. "People want to be in gold and silver and they will stop paying attention to the regular markets," Wiegand said. His revised forever high number pegs gold at $4,400/oz. and silver at $256/oz. Others have predicted even higher highs. ^[34] After that, investors will drive bullion prices higher "with a breach of $1,600 in the second half still a strong possibility". (Coincidentally, that is the price I set as my 2011 target in my January predictions.) This forecast may help to explain why gold stocks have been laggards this year, despite the rise of bullion to a record high. ^[35]

As silver prices tumbled from near record levels, holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, dipped 1 percent to 11,251.98 tonnes by April 26, from a record high of 11,390.06 tonnes in the previous session. All eyes are on the result of the Fed meeting and a news briefing by Chairman Ben Bernanke afterwards, with expectations that the central bank will probably show no hurry to scale back its massive support for the economic recovery. A fresh batch of corporate results pushed U.S. stocks to their best levels since June 2008 on Tuesday, renewing optimism that profit growth will remain resilient enough to keep equities on the rise. ^[20] Ben Bernanke's press conference, widely anticipated, offered no big surprise either, and gold and silver prices kept rising. Bernanke said that the Fed expects growth to slow in the U.S. in 2011 to 3.1%-3.3% while core inflation will rise to 1.3%-1.6%, below its 2% inflation mandate. ^[28]

U.S. GROWTH SLOWS, INFLATION RISES Spot gold XAU= rose to a lifetime high of $1,538.35 an ounce, breaking records for the ninth time in 10 sessions. It was later up 0.6 percent at $1,535.60 an ounce. ^[8] U.S. gold futures rose to a record high of $US1530.80 an ounce, before easing slightly to $US1528.10, up 0.7 per cent. ^[4] The spot price was last down 0.4 per cent at $1,502.40 an ounce, while U.S. gold futures for June delivery finished down 0.4 per cent at $1,503.50, trading between $1,492.00 and $1,508.50 during the session. ^[12]

At 2:35 p.m. on Wednesday, gold futures climbed 1.19 percent, a $17.90 gain to $1,521.40 per troy ounce. Gold futures setting record prices on Wednesday marks the second time this week. ^[17] Before noon on March 31, gold futures' price was $1,437.50 per troy ounce. ^[9]

PRICE !!!!!! Gold is $1520 plus per ounce and Silver is $46.00 per ounce. Silver is the "BLUE COLLAR GOLD "and a much better "BANG" for the "BUCK".Plus the dual status of Silver as both a "precious" metal as well as an "industrial" metal has added to its appeal and certainly helped it to outperform the Gold. ^[36] Gold succeeded to achieve all time high above $1,538 per ounce whereas notable metal silver also hit a record high. ^[24]

Having hit a high of almost $US50 an ounce on Tuesday, silver has eased a bit, proving how volatile it is at the best - or perhaps that should be worst - of times. Yes but you wouldn't credit this, only if gold actually drops. That would be because the U.S. has lifted interest rates, the sovereign debt crisis suddenly disappears or China, which has switched from being a silver exporter to a heavy importer, falls in a heap. ^[21] Silver peaked at the same time as gold - at $US50.35 an ounce when the Hunt brothers cornered the market. That was $45.48 an ounce at the then exchange rate, and would be $166 in today's dollars. ^[21]

Silver climbed on the back of a tumbling dollar and surging gold prices to within a whisker of $50 an ounce, eclipsing the peak hit when Texan brothers William Hebert and Nelson Bunker Hunt sought to corner the silver market three decades ago. ^[32] The gold price soared to a record intra-day level of $1,538.80 an ounce while the spot gold price was less aggressive rising $6.90, according to Kitco's gold index. Silver prices for July moved $1.55 higher to settle at $47.54 an ounce. ^[11] The U.S. dollar index was moving lower to $73.66. Silver prices added 90 cents to $45.95 an ounce. Both metals were climbing even higher in after-hours trading. ^[28] Since the start of QE2 November 3rd, the U.S. dollar index is down 3.46% and gold is up 10.60% while silver has exploded 82.35%. Clearly the bulk of this movement in gold and silver has not just been dollar driven; the extra rally can be attributed to anything from fear buying to speculative trading, but a weaker dollar is an underlying theme for higher metal prices. ^[29]

The U.S. dollar slipped to a 16-month low versus the euro and sterling. The buck continued to linger near its record low versus the Swiss franc and trading weak against the yen. Elsewhere, the price of silver moved back near its 31-year peak, hit recently, and platinum moved up in morning deals. In economic news, the U.S. Labor Department will release its weekly jobless claims report at 8.30 a.m. ET. Economists expect claims to have declined to 390,000 in the week ended April 23. ^[37]

The price of the precious metal hit a new record high for the third straight day of $1,569.30 on the back of a weakening U.S. dollar. ^[26] Silver may rise to $55 an ounce by the end of year, Dennis Wheeler, the chief executive offer of Coeur d'''Alene Mines Corp., the largest U.S. silver producer, said today at the Bloomberg Link Precious Metals Conference in New York. ^[1] The price of platinum may climb to $3,000 an ounce and palladium prices to between $1,500 and $2,000 an ounce over the next five years, Francis McAllister, chairman and chief executive officer at the Stillwater Mining Company, said today at the Bloomberg Link Precious Metals conference in New York. While platinum will remain the more expensive of the two metals, the gap between their prices will narrow, he said. Demand for the metals from the auto industry, particularly in China, will drive prices, he said. ^[1]

There are lots of '''bullish''' fundamentals that will continue to support gold prices, and negative real interest rates make the metal '''attractive,''' Jennifer Fan, a partner and senior portfolio manager at Arrowhawk Capital Partners, said today at the Bloomberg Link Precious Metals Conference in New York. Richard Sands, president and chief executive officer at Casimir Capital LP, said he is '''very bullish''' on gold. ^[1] Money creation, increasing liquidity and the global macroeconomic environment will continue to boost gold prices, Michael Cuggino, the president and portfolio manager of Permanent Portfolio Family of Funds, said today at the Bloomberg Link Precious Metals Conference in New York. ^[1] The gold market is '''not a bubble,''' and prices will continue to climb in the long term because global monetary policy is '''out of sync''' with the real economy, John Hathaway, the senior managing director of Tocqueville Asset Management LP, said today at the Bloomberg Link Precious Metals Conference in New York. ^[19]

Gold in particular was seen as a safe commodity in a troubled economic and political situation and it had been breaking all previous records in recent weeks as the global inflation presented a jump. At the New York Mercantile Exchange Gold'''s June contract added its record run by achieving $1,533.40 per ounce, increased $2.20 or 0.10%. ^[24] The most-actively traded gold contract, for June delivery was recently up $6.40, or 0.4%, at $1,537.60 a troy ounce after hitting an intraday record $1,541.00 on the Comex division of the New York Mercantile Exchange. ^[38]

Gold prices for June added $13.60 to close at $1,517.10 an ounce at the Comex division of the New York Mercantile Exchange. ^[28]

Silver followed the gold price higher, rising nearly 1% to $48.80 per ounce. ^[22] Gold well may face the same situation but anyway it is better to wait until the prices break above the record level of $1945 per troy ounce. The second aspect that raises concerns is the pace at which the gold price keeps growing. It is comparable to the price hike in the crude oil market before the collapse. ^[39]

Copper and most other industrial metals fell on worries that U.S. economic recovery could stall and that top buyer China could resort to more monetary tightening that could further weaken demand. The spot price of gold reached $1,529.90 an ounce, its eighth record in nine sessions. ^[6]

GOLD PRICE NEWS ''' The gold price rose $4.64 to $1,531.79 Thursday morning as the weaker U.S. dollar helped propel the price of gold to a new all-time high.'' ^[23] The gold price has risen 7% over the last month as investors have sought a save-haven against inflation and the softer U.S. dollar. ^[26]

Gold's usual inverse relation to the dollar has been weakening consistently since mid-April, however, meaning the bullion price will derive less of a bounce from any softness in the U.S. currency. Silver prices are still up about 50 per cent so far this year after gains of more than 80 per cent last year. ^[12] Unlike silver, gold is used mainly as a store of value and for decorative purposes. The report predicts that gold production will increase by 6 per cent this year compared to only 0.4 per cent in 2010, which would normally have a depressing effect on the price. ^[35]

Silver finished at $45.96 an ounce. That's not an all-time high ''' silver hit US$55 an ounce in 1980 when the Hunt brothers tried to corner the market. It's a huge jump of 49.6 per cent from the price of $30.72 that prevailed as we entered this year. ^[35]

Silver futures for July delivery rose $1.554, or 3.4 percent, to $47.541 an ounce, the highest settlement price since 1980. This year, the metal has surged 54 percent, the most among 19 raw materials in the Thomson Reuters/Jefferies CRB Index. ^[19] Silver futures for July delivery rose $1.058, or 2.2 percent, to $48.599 an ounce. This month, the metal gained 28 percent, the most since January 1983. ^[40]

Silver futures for July delivery rose 90.8 cents, or 2 percent, to settle at $45.987 an ounce on the Comex. ^[18]

Gold futures for June delivery rose $13.60, or 0.9 percent, to settle at $1,517.10 at 1:48 p.m. on the Comex in New York. ^[18] Palladium futures for June delivery rose $16.85, or 2.2 percent, to $792.15 an ounce on the New York Mercantile Exchange. ^[40]

NEW YORK (Dow Jones)--Gold futures topped $1,550 an ounce Friday as investors sought an alternative to the U.S. dollar. ^[41] NEW YORK (Dow Jones)--Gold and silver futures extended their unprecedented rally Thursday, with both metals finishing at record highs after data showed U.S. economic growth slowed while prices for gasoline and food rose. ^[42] NEW YORK (Dow Jones)--Gold futures extended record highs Friday as the U.S. dollar continued its slide and data showed rising inflation in the euro-zone. ^[38]

In New York, U.S. copper futures for May delivery on COMEX settled down 9.10 cents, or 2.1 percent, at $4.2280. On the agricultural front, calls for rain needed to help the developing hard red winter wheat crop in Kansas pushed wheat futures down 4.2 percent, their biggest drop in two weeks. ^[6] Silver futures for July delivery rose $1.554, or 3.4%, to close at $47.541 on the Comex in New York. ^[1]

Silver futures for May finished down at $45.05, having closed at $47.149 on Monday. Gold posted its second daily decline, in spite of the weakness in the dollar, which usually acts as an incentive to non-US investors to buy the metal. ^[12] U.S. gold futures GCv1 edged up 0.4 percent to $1,510. Spot silver rebounded 1 percent to $45.96, after posting a 3 percent decline on Tuesday, its largest daily loss in six weeks. ^[20] Meanwhile in late U.S. trade, gold futures gained 0.90% or $14.10 to settle $1,531.20 per ounce on the Comex division. ^[24] At 7:20 a.m. on Friday, gold futures were up 0.35 percent, an increase of $5.30 to $1,536.50 per troy ounce. ^[9]

Gold futures in Shanghai rose to a record 318.56 yuan ($48.98) per gram. ^[30]

Silver futures resume driving toward two milestones: surpassing $50 per troy ounce and the record price of $50.35 per troy ounce. ^[17]

Total silver holdings of 498.914 million ounces price at $45.50/oz are worth only some $22.7 billion, suggesting that silver remains under-owned when compared to gold and could see a sharp increase in holdings in the coming months and years. ^[3] The spot gold price was climbing $22.40, according to Kitco's gold index. The Fed unveiled no surprises with its latest FOMC rate decision Wednesday, and gold and silver were rallying as a result. ^[29] Gold has done a bit better than silver over the last couple of days, but we're still in a holiday period here in London so trading volumes are not as high as normal and I don't think there will be a huge move (ahead of the Fed," said Mitsubishi analyst Matthew Turner. "I don't think there's much outlook until after the press conference," he said. Gold could continue to draw strength from any weakness in the dollar, particularly if the Fed maintains its accommodative policy stance, in contrast with the European Central Bank, which has raised rates as it attempts to curb inflation. ^[3] The dollar fell to the lowest since December 2009 against the euro after the Fed kept borrowing costs at a record low and said it would continue $600 billion in bond purchases through June. The European Central Bank this month began raising rates to stem inflation. '''This move is about the dollar,''' said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. ^[18]

The price traded at $1,528.88 at 3:42 p.m. The Fed has kept its benchmark rate at zero percent to 0.25 percent since December 2008 to stimulate the economy. Today, the central bank raised its estimate for core inflation and reduced its growth outlook for 2011. Earlier this month, the European Central Bank raised its main lending rate by a quarter point to 1.25 percent and signaled it will continue with increases to stem inflation. ^[18]

Fed Chairman Ben S. Bernanke signaled yesterday that the U.S. central bank will maintain monetary stimulus. The central bank kept its target rate for overnight lending between banks at zero to 0.25 percent, while ending $600 billion of bond purchases on schedule in June. ^[30]

Former Fed Chairman Paul Volcker ended gold'''s rally to a then-record $873 by raising borrowing costs to 20% in March 1980. A fortnight ago, this column warned that silver, trading at $40, had '''seldom looked so expensive'''. It almost touched $50 on Monday. Mea culpa? No. Such parabolic moves are typical of bubbles, which tend to unwind just as rapidly. Having traded more than 26% above its 50-day moving average ''' no other commodity was remotely as overbought ''' the metal finally sold off, quickly falling below $45 on Tuesday. ^[1] The discrepancy could leave the door open to more monetary easing or, at the very least, no rate hikes. A loose money policy winds up hurting the dollar as more greenbacks in circulation make them worth less, lifting gold and silver as a perceived safer form of money. Gold and silver don't always react inversely to the dollar, but today they are, moving higher as the dollar falls. The metals were also benefiting from short covering as traders who were betting against the metals headed into the Fed had to buy back those positions. ^[28]

Gold advanced to a record after the Federal Reserve pledged to keep interest rates near zero to bolster the recovery, weakening the dollar and boosting demand for precious metals as a store of value. ^[30] SINGAPORE, April 29 (Reuters) - Silver and gold were within sight of historic highs on Friday and could resume an uptrend as the dollar held near three-year lows against a basket of currencies on the Federal Reserve's intention to keep interest rates near zero. ^[7]

Analysts said the Federal Reserve's decision Wednesday to hold U.S. interest rates at 0-0.25 percent "for an extended period" benefited gold. ^[25] Financial experts suggested that the Federal Reserve's decision on Wednesday to hold U.S. interest rates at 0-0.25 percent for a stretched time period mainly benefited the yellow metal. ^[24] European stock index futures pointed to a higher open on Thursday, with shares poised to rise for a sixth straight session, after the U.S. Federal Reserve signalled it would not raise interest rates any time soon. ^[14]

The Nasdaq jumped to a 10-year high as U.S. stocks rallied on Wednesday after Fed Chairman Ben Bernanke's first-ever press conference did nothing to short-circuit investors' optimistic outlook on the economy. U.S. crude futures rose to their highest in 2-1/2 years on Thursday as the Federal Reserve appeared in no rush to tighten its monetary policy, weakening the dollar, and as gasoline stockpiles fell more than double the forecast. ^[14] The dollar slumped to three-year lows on Thursday, pushing U.S. crude oil to a 2-1/2 year high, while Asian stocks rose as investors bet the easy U.S. monetary policy will continue to drive money to riskier assets. ^[14]

U.S. crude oil futures rose on Thursday to hit a 31-month high settlement after a volatile trading session that saw a weak dollar attract investors seeking alternative assets. ^[7]

As gold is priced in dollars, any fall in the currency means it becomes cheaper for investors using other currencies to buy. "If the dollar continues to weaken, then its only likely to boost gold as well as silver as the inverse relationship between the two assets persists," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore. ^[26]

Precious metals rebounded from Tuesday's poor performance on Wednesday as gold futures notched record highs and silver futures again approached two significant benchmarks, Bloomberg reports. ^[17] The falls of gold and silver prices seem to be just a short term correction for the market. Weren't necessarily a shift in direction of these precious metals. ^[43] Total Silver ETF Holdings - 1 Year (Daily) Indeed, the ETF holdings appear to show that ETF precious metal holders are '''stickier hands''' than had been expected as gold holdings look to have consolidated above the 64 million ounce mark. ^[3] Gold in Yen - 1 Day (Tick) Sovereign debt risk can now be seen in the eurozone but also in Japan and the U.S., and as long as sovereign debt risk remains elevated, precious metals will continue to be bought as hedges and for safe haven purposes. This should lead to the continuation of gold and silver'''s secular bull markets. ^[3]

"So obviously, the safe-haven buying continues in gold and silver." Jay Taylor, publisher of Gold, Energy & Technology Stocks and host of the "Turning Hard Times into Good Times" radio program, said 1,500 is just a number and not really a meaningful one because the measuring stick is the dollar, which isn't a stable unit of measure because trillions of them are being created out of nothing by government entities all the time. "It is less about an increase in the value of gold, than a devaluation of the dollar," he said. Based on the games being played with currency in the U.S. and all over the world, he predicted that number will probably continue to climb. ^[34] In consideration of the fact that a gold dollar would be very small, and that there was really no need for two kinds of dollars to circulate, the gold coin to be minted would be a $10 coin called the "Eagle." It's interesting to note that Hamilton's calculations of the value of silver to gold came to equal the same ratio as set in Biblical times. 15 ounces of silver equal to 1 ounce of gold. ^[44] Gold approached $1,570 an ounce, extending a rally to a record, on bets that the dollar will extend a slump, enhancing the allure of the metal as a store of value. ^[40]

A gold ring is a traditional present to wish a baby good luck and fortune, but a rise in gold prices to a record $1,508 an ounce on Thursday has priced even the most devoted out. ^[3] Gold prices stayed in a tight range, trading between $1,517.10 and $1,503.30 an ounce. ^[29] Here's some perspective: history, demand and supply. Brief history of gold price : Gold had sold for $35 an ounce, then shot up to $675 during the last bubble, peaking in January 1980. (I'm using monthly averages throughout this article.) That's cool, buying at $25 and selling at $675. ^[45] Gold prices have stayed in a tight range from $1,517 to $1,503 an ounce, while the spot gold price was up $14.70, according to Kitco's gold index. ^[28]

Almost on cue, the gold price marched above $1,530 to another new record high. ^[23] The gold price jumped to $1,538.80, the latest in a series of new all-time highs for the yellow metal. The gold price extended its monthly and year-to-date gains to 6.9% and 8.3%, respectively. ^[22]

s McEwen, who expects the metal to rise to $5,000 over three to four years. Prices have advanced 7.7% this year, extending a decade of gains in which gold jumped sixfold from a low in 1999. ^[1] The huge volatility has resulted in a rise in margin requirements for speculators. Silver trading, it appears, is best left to those with strong stomachs. (Editor'''s Note: A little knowledge is a dangerous thing. This superficial analysis of silver purports to analyse the silver market and yet completely ignores the fundamental driver of prices in the silver market and other markets ''' supply and demand. It also completely ignores the fact that silver is near record nominal highs and well below real inflation adjusted highs of $140/oz (see chart above). It talks about '''silver trading''' being best left to '''strong stomachs'''. This is true however trading and speculation is in large part why wealth has been decimated in recent years and passive allocation and diversification into safer assets would be more prudent advice then superficial analysis regarding trading silver. ^[1] Silver has surged 162% in the past year, outpacing the 31% gain in gold. Investment demand for silver jumped 40% in 2010 as inflation rose, currencies lost value and Europe'''s debt crisis escalated, said researcher GFMS Ltd. Industrial use gained 21% last year and may climb to a record this year, London-based GFMS said. ^[1]

''And with the price of gold, silver, oil, and a bevy of other commodities at multi-year and/or all-time highs, it is clear that many individuals and institutions across the globe remain concerned about inflation.'' Until such time as the Fed begins to deviate from its ultra-loose stance, the gold price and broader commodities complex are likely to remain well supported. ^[23] Gold may have the glamor but silver has the momentum right now. There are two diametrically opposing views on this. Gold and silver are in a classic bubble phase and that both are overdue for a major price correction. The other is that with inflation on the rise, there is a lot of upside potential remaining for both. ^[35]

Gold would have to drop to $700 if the silver price stays where it is. ^[21] "In terms of pure performance, whereas gold has delivered a solid gain of 26.51% in the course of the last year, silver has outshone gold spectacularly, turning in a gain of 123.55%, making it the commodity trade of the year by far." He ventured to say that $5,000/oz. gold and $300/oz. silver could be a reality in the not too distant future. ^[34] "The sinking dollar is driving people to the gold market as speculators betting on a further rally are adding more fuel to the fire," said Lim Han Jo, a Seoul-based trader with Tongyang Futures. "I don't exclude the possibility of gold hitting $1,800 this year." ^[9] Haber looks at the 12 month euro/dollar futures contract compared to the spot month and will be looking to see if that expectation decreases tomorrow. "With gold going up $20 and the dollar getting hit again. the interpretation was that it's zero for as far as the eye can see." Haber sees a QE3 in the future but not immediately, "it's almost psychological." Haber says when the Fed has thrown this much money at the "problem" and if growth weakens after QE2, "they won't have anything else to do QE3." ^[28] '''The sinking dollar is driving people to the gold market,''' said Lim Han Jo, a Seoul-based trader at Tongyang Futures Co. The Fed has kept its benchmark lending rate at zero percent to 0.25 percent since December 2008 to stimulate the economy. ^[40] '''What'''s behind gold'''s rally is investors''' fear over the dollar'''s decline,''' said Hwang Il Doo, a Seoul-based senior trader at KEB Futures Co. '''As long as the U.S. keeps interest rates low, it'''s perceived by the market to buy more gold.''' ^[30] There doesn't seem to be an end in sight for the metal's historic rally as U.S. interest rates are set to remain low for some time, keeping speculative investment strong in gold even as demand is on the rise for a hedge against global inflationary pressures. ^[41] Gold will reach $1,650 an ounce in the next 12 months as investment demand increases on the back of low interest rates, Credit Suisse AG said yesterday. ^[30]

The dollar sank to a three-year low against a basket of currencies on Thursday and was at risk of a drop to $1.50 versus the euro, with momentum-driven investors piling on in anticipation U.S. interest rates will be low for a long time. ^[14]

Federal Reserve chairman, Ben Bernanke, can be thanked for the rally. The unanimous decision by the Fed to keep interest rates at 0-0.25% until at least the fall as well as keeping its balance sheet the same size after quantitative easing ends in June meant more cheap money for longer. The Fed will reinvest its profits from its current $600 billion bond buying program back into the market not adding extra cash but not taking any away either. ^[11] Crude oil prices began rising strongly on Wednesday on the back of the Federal Reserve's decision to continue pursuing an exceptionally supportive monetary policy. Citing the economy's "moderate" recovery, the central bank kept the door open for more economic stimulus, while saying its current $600 billion programme would be allowed to run its forecast course through June. ^[25] The dollar stumbled further on Thursday as official data showed U.S. economic growth slowed sharply in the first quarter to a 1.8 percent pace. The euro struck 16 month highs close to $1.49, also after the U.S. Federal Reserve held its easy monetary policy. ^[25] Gold and silver were building on strength as the U.S. dollar fell on the back of assurances Wednesday by Federal Reserve Chairman Ben Bernanke that. ^[42] The dollar fell to the lowest since December 2009 against the euro yesterday after the Federal Reserve kept borrowing costs at a record low. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, have expanded 1.5 percent this month, heading for the biggest gain since August. ^[27]

Traders of precious metals and currency markets today booed the Federal Reserve's decision to leave its monetary policy alone as gold (-GC) hit a new high. ^[31] NEW YORK (Dow Jones)--Gold and silver futures steadied Wednesday as traders awaited a monetary policy decision from the Federal Reserve. ^[46]

SYDNEY (Dow Jones)--Precious metals took flight again in Asian trade Thursday, as investors interpreted U.S. Federal Reserve chairman Ben Bernanke's first-ever news conference as indicating further weakness in the dollar and the prospect of higher-than-usual inflation. ^[47] The all-time inflation adjusted record is $2,338.92, based on the value on Jan. 21, 1980, according to a calculator on the Web site of the Federal Reserve Bank of Minneapolis. ^[1]

Gold notched a record high above $1,569 per troy ounce, rising 4.1 per cent on the week. ^[48] Ounce for ounce you're paying more for a coin than a bar because of the retail margin, where you're likely to be paying 5 per cent more buying and getting 5 per cent less selling. The other catch is mints are issuing so many of them that they will never be considered rare. The most popular are the U.S. $1 Silver Eagle (165 million sold and rising), Canada's $5 Maple Leaf (13 million so far but they are one decimal place purer than any other silver coin) and the Perth Mint's $5 Kookaburra (more than 8 million). ^[21] U.S. silver jumped as much as 6 per cent to $US48.75 an ounce earlier in the day, then softened to $US48.55. ^[4]

Back home, there's Physical Silver Securities (ETPMAG) run by ETF Securities. ''It's getting more money than our gold fund,'' the head of Asia-Pacific sales for ETF Securities, Nigel Phelan, says. The fund invests purely in silver and so slavishly follows its price, less the 0.49 per cent annual fee. Another way to trade silver is through ''minis'' offered by RBS. These are glorified contracts for difference (CFDs) only less risky because there's a built-in stop-loss. ^[21] Holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, extended losses from the previous session, down 1.8 per cent to 11,053.20 tonnes. Spot silver has gained 57 per cent so far this year, compared to gold's 8 per cent ascent. The surging demand for physical silver, especially in Asian countries, has helped support its recent rally. ^[4]

As of the close of trading on April 27, the S&P;/TSX Global Gold Index was down 4 per cent year-to-date. Many precious metals funds are in a loss position year-to-date, especially those that are heavily weighted to gold. ^[35] Gold and silver equities lagged precious metals on Thursday, with the Philadelphia Gold & Silver Index (XAU) sliding 0.7% to 220.39. ^[22]

Streible would be buying if gold sunk to $1,505-$1,510 level and if silver breaks south of $46. Those levels look hard to reach with the metals taking off after the Labor Department said people filing for unemployment claims last week rose more than expected. ^[11] The iShares Silver Trust (NYSE:SLV) is trading at $47.26, +0.26 (+0.55%) and the SPDR Gold Trust (NYSE:GLD) is trading at $149.36, +0.16 (+0.11%). This morning economic reports were somewhat poor as Jobless Claims were reported at 429,000. ^[49] Gold rose to new record nominal highs at $1,540.85/oz in early Asian trading last night. ^[1]

As gold was shooting up, plenty of new "investors" were buying, and there were plenty of people who got in on the boom at above $600. Within two and a half years, gold had lost half its value. It finally hit its trough in 1999, 19 years after the peak, at $257 an ounce. That would have been a good time to buy, but who would have thought? Gold had slumped for nearly two decades. It appeared to be a stupid time to buy. ^[45] By the time the mine is operating, gold is down to $300 an ounce. It turns out the bazillion dollars of upfront expense are not justified by the production economics, but the mine continues to operate because it's covering its variable costs. (This might be a good time to review the microeconomics of fixed costs and variable costs.) ^[45] Most do not even know how much an ounce of gold costs in local currency terms as precious metals continue to be ignored by most of the non financial press or media. This is in stark contrast to the Middle East and Asia where demand remains robust and may even be increasing due to inflation concerns. ^[3] In late U.S. trade the precious metal reached a record of $1,569.30 an ounce. ^[26]

Silver, meanwhile, pushed to $49.17 an ounce, also a record, climbing from the $10 level in just 30 months. Commerzbank said there were market signs that silver bullion investors were readying significant sales, "suggesting that the price rally in silver is nearing its end." ^[13] GFMS believes that overall industrial demand will increase by 180 million ounces between now and 2015 at which time it will reach 665.9 million ounces. You would logically conclude from this that the price of silver will continue to rise. That's true in the short term says GFMS, which predicts prices will remain high through 2012 with the average for 2011 "comfortably eclipsing the 1980 record high" in nominal terms (but not inflation-adjusted terms). Once this run is over, prices will start to drift lower "in reflection of less robust investment in the silver market". ^[35] The vast majority believed that gold and silver'''s strong fundamentals (especially due to anemic supply and strong demand) should result in prices continuing to rise in the coming years. ^[1]

"Gold is again profiting from the soft U.S. dollar and has (struck) an all-time high for the third consecutive day," said analysts at Commerzbank. "The fact that the rise of the gold price is largely driven by the U.S. dollar currently is also reflected in the movements of the price in euros,. trading nearly unchanged," they added. ^[13] Thursday's gold price rally and U.S. dollar sell-off were fueled by two worse than expected economic reports. ^[22]

April 25 (Bloomberg) -- John Roque, a managing director at WJB Capital Group Inc., discusses gold prices, the dollar and his investment strategy for the U.S. stock market. ^[30]

The dollar's decline cuts two ways. It boosts profits of U.S. companies with big overseas operations, like 3M (MMM), Hewlett-Packard (HPQ) and Caterpillar (CAT). Commodities priced in dollars, like oil, gold and silver, rise as well as traders seek to maintain their relative values. ^[31] The dollar'''s downward spiral and concerns about inflation pushed gold and silver higher this week as investors clamoured for an alternative store of value. ^[48] With silver demand exploding some expect the ratio to close even further. Will silver eventually close the gap? In 1980 as both gold and silver reached what we still refer to as all-time highs, (after adjusting for inflation and debasement of the dollar) the gap closed to its historical level. ^[44]

"Ultimately, what we are seeing here is a market that has continued to be buoyed by yesterday's Bernanke statements, which were interpreted to be quite dovish. "The U.S. dollar continues to soften, and gold and silver continue to be used as hedges against this type of risk. ^[32] During the first round of quantitative easing, from November 2008 to March 2010, the U.S. dollar index fell 5.11% while gold rallied 38.41% and silver popped 59.88%. ^[29]

Gold'''s recent rise has not been solely U.S. dollar related as gold has risen to new record nominal highs in British pounds and yen. ^[1] Since January 1, gold has climbed barely 1 per cent, a victim of the dollar's surge against the U.S. dollar. ^[21] The gold rose 9.90 dollar, or 0.7 per cent to the high of 1,541.30 dollar an ounce on the Comex. ^[16]

''Less than one tenth of 1 per cent of the world's investors were aware that silver was rarer than gold,'' Butler says. ^[21] Gold consumption follows a very different pattern. GFMS released its annual gold survey on April 13 and it showed that 52 per cent of existing above-ground gold is held in the form of''jewelery, 19 per cent by private investors, 16 per cent by central banks, 11 per cent in "other fabrications", and 2 per cent "lost and unaccounted". ^[35]

Crude oil prices closed mixed in cautious trade as investors awaited the outcome of a key U.S. central bank meeting and Arab turmoil kept supply worries in focus. ^[12]

Silver has also been massively short-sold through futures and options contracts, according to the leading silver analyst in the U.S., Theodore Butler. That's selling something you don't have, so you must buy later to meet the contract. This is no crackpot. He was instrumental in bringing two leading banks to trial, still under way in the U.S., for rigging the silver price by short selling. When short sellers can't get their hands on the commodity there's strife. It's known as a ''squeeze'' in the trade and the price consequently rockets temporarily. Butler estimates there are about 1 million ounces of silver circulating while what he calls the ''monstrous'' short position runs into billions of ounces. ''Silver has the largest short position that's ever existed in anything,'' he says. ^[21] Then the Hunt brothers were hoarding silver, at one point holding one-third of the world's non-government supply, which created an artificial scarcity. This time it's short sellers in options and futures contracts, trying to drive the price down, who are creating the shortage because they're borrowing so much of it. Eventually this will send the silver price soaring as spectacularly as it collapsed after the Hunt brothers. Since you asked, they came unstuck with a margin call after the Comex commodities exchange suddenly changed the rule book for buying commodities on margin loans. Certainly there isn't enough new silver being produced to come anywhere near the demand on paper for it, a legacy of the long period when its price was so low that it wasn't profitable to mine it. ^[21]

The declining dollar in the wake of a Standard & Poor's rating agency outlook downgrade and increasing oil prices signaling possible inflationary pressures was also good news for silver, which hit a 31-year high of $44/oz. on Tuesday. ^[34] In London, May Brent crude closed at $125.13 a barrel, up 99 cents, after hitting the day's high at $125.80, closing in on the year's high of $127.02 struck on April 11. "The Fed is sticking to its policy, and, as a result, we have to expect recent trends in the dollar and commodities to remain intact," said John Kilduff, partner at hedge fund Again Capital in New York. ^[6] Spot gold XAU= was bid at $1,530.56 an ounce at 0706 GMT from $1,526.40 late in New York on Wednesday. ^[14] Spot gold was bid at USD 1,530.99 an ounce in early trade against USD 1,526.40 late in New York yesterday. ^[15]

Emerging market nations will be major purchasers of gold in the coming years, George Milling- Stanley, managing director for government affairs at the World Gold Council, said today at the Bloomberg Link Precious Metals conference in New York. ^[1] '''We'''re in a legitimate market driven by financial interest in silver and strong industrial demand,''' Chief Executive Officer Dennis Wheeler said today at the Bloomberg Link Precious Metals Conference in New York. ^[1] The rally in silver to a 31-year high in New York shows no sign of ending because tight supply and robust demand will send the metal to a record, according to Coeur d'''Alene Mines Corp., the largest U.S. producer. ^[1]

Silver may drop in the short term after the metal'''s ratio to gold was '''overextended''' and prices touched a record in London, Standard Chartered Plc said. ^[3] As of yesterday April 26 th, silver price has risen by 19.5%, while gold price increased by 5.22%. As of yesterday, April 26 th the ratio between gold and silver bounce back and reached 33.35 - This shift in direction is the first one since April 12 th. ^[43] Despite the falls from yesterday, Gold prices are still above the 1,500$mark and silver price is still above the 45$mark. ^[43]

Silver has continued to outperform gold and nearly all other commodities in 2011, with a year-to-date gain of 57.3%. Is the gold price rally set to pause? It could, according to Steven Scacalossi, Director at TD Commodities, who noted this morning that, '''Gold continues to ebb higher towards 1540. ^[22]

Looking ahead, the report warns that we could see a retracement in the gold price to the high $1,300s range in the next three months, which will bring out the bargain hunters. ^[35]

Gold reached a historic $1,538.48 on the London Bullion Market on Thursday, after silver knocked up a best ever $49.79 an ounce at the start of the week. ^[25] Silver pricesbouncedback from Tuesday's 4% sell-off, adding 90 cents to settle at $45.95 an ounce. Both metals were climbing even higher in after-hours trading. ^[29] Coeur d'''Alene, which is based in the Idaho city of the same name, fell 51 cents, or 1.6%, to settle at $31.70 in New York Stock Exchange composite trading. ^[1] Benchmark crude for May delivery rose 55 cents to settle at $112.76 per barrel on the New York Mercantile Exchange. ^[5] Bullion for June delivery in New York rose as much as 1.1 percent to $1,534, an all-time high. ^[30]

Gold for immediate delivery rose as much as 1.6 percent to a record $1,529.68. ^[18] Gold for immediate delivery climbed as much as 2.2 percent to an all-time high of $1,569.32. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, have expanded 1.5 percent this month, heading for the biggest gain since August. ^[40]

Gold for June delivery settled at a new closing high of $1,531.20 an ounce, up $14.10 from Wednesday, after reaching an intraday high of 1,536.40. ^[31] Gold for June delivery, the most actively traded contract, gained $13.00 to $1,530.10 an ounce. ^[37]

Spot gold XAU= was last up 0.4% at $1,506.90 an ounce by 0940 GMT, about 0.8% below Monday's record high at $1,518.10. ^[3] Spot gold matched the record high of $US1529.90 hit in the previous session. It had since trimmed gains to $US1527.29 an ounce, little changed from the previous close. ^[4]

We invest a bazillion dollars upfront, and then we can mine gold for only $200 an ounce." ^[45] "Gold has followed the misfortunes of the dollar," said Darren Heathcote, head of trading at Investec Australia. "It looks very difficult to find a reason to sell gold right now, and technically we are targeting $1550. Bulls are very much in control of this market at the moment." ^[4] The Hong Kong Mercantile Exchange, backed by the world'''s largest lender, will start trading dollar- denominated gold futures on May 18, tapping demand for the metal which has rallied for 10 consecutive years. ^[3] Gold futures continued their record run and ended higher on Friday as good prices surged in the U.S., although earlier rising trend were halted because of lack of direction from Japan and UK, where markets remained shut for national holidays. ^[24]

The current situation is different from the one that was seen 3 years ago. Taking into account the growing inflation pressure and the current USD exchange rate, gold hasn't still reached its all-time price record of 1980. ^[39] Put against gold, silver does look distinctly racy. The ratio of gold to silver prices is at its lowest since 1980, and has plunged from 46 in January this year to 33. ^[3] U.S. silver SIcv1 was last up 1% at $45.52. Implied volatility in silver options has been at its highest this week since November last year as the spot price has swung from lows around $43 to highs above $49 in the space of a week. ^[3] There are five other listed stocks mining silver. Alcoyne Resources (ASX code AYN), formerly Macmin Silver, expects to produce its first silver from its Queensland mine this month and says it costs just $14.02 an ounce to mine silver. Cobar Consolidated Resources (CCU) has just raised $28 million to develop its Wonawinta mine and expects to produce 2.5 million ounces of silver a year. ^[21] At 7:21 a.m., silver futures were up 2.71 percent, a $1.289 climb to $48.83 per troy ounce. ^[9] The minimum amount of cash that traders must deposit for speculative positions in silver futures will rise 13 percent to $14,513 per contract after the close of business today, CME Group Inc., the Comex parent, said yesterday. ^[40]

U.S. silver futures SIcv1 bounced 2.3 percent to $46.07, recovering from losses as deep as 5.4 percent in the previous session. ^[20]

Cash silver strengthened 0.6 percent to $48.1313 an ounce, gaining for a second day and approaching the record $49.79 reached on April 25. ^[30] Silver for July delivery climbed $1.279, or 2.7 percent, to $48.82 an ounce and platinum for delivery the same month jumped $9.60, or 0.5 percent, to $1,849.50 an ounce. ^[27] The most-actively traded silver contract, for May delivery, was up 14 cents, or 0.3%, at $45.190 a troy ounce. ^[46]

Spot silver rose by 1.6 per cent to $US48.52, extending gains made in the previous session. It hit a 31-year high of $US49.31 on Monday. ^[4] Demand for ''fabrication'' - silver used in industry or jewellery - rose 13 per cent last year, while investment demand shot up 47 per cent. ^[21]

Only the fact that scrap silver climbed 14 per cent, and stocks were run down, prevented the price going even higher. There's no reason to suppose that the amount of silver produced will be stepped up at its much higher price. ^[21] Despite all the buzz about bullion recently, that represents an increase of only 6.8 per cent from the 2010 year-end price of $1,420.78. ^[35]

Discovering new deposits has become more difficult, while '''older mines cease production at a time when demand continues to grow,''' said Wheeler, whose company is based in Coeur d'''Alene, Idaho. High prices are not '''a short-term phenomenon,''' and the metal may jump to $55 by the end of 2011, he said. ^[1] Fuel prices have risen sharply because of the oil run-up. AAA's Daily Fuel Gauge Report put the average retail price of gasoline at $3.886 a gallon, up 7.8% this month alone. Wal-Mart Stores (WMT) is already seeing customers cutting back at the end of the month because they're running out of cash, CEO Mika Duke told a New York event on Wednesday. ^[31] New York's main futures contract, light sweet crude for June, fell seven cents to close at $US112.21 a barrel. ^[12]

The new Hong Kong gold futures will be 1 kilogram per contract, with physical delivery in Hong Kong. ^[3]

In studying the values set for foreign coinage, Hamilton observed that gold carried 15 times more value per the same unit of measure as did silver. It was in the Act that a gold dollar would contain 24.75 grains of gold and a silver dollar would contain 371.25 grains of silver. ^[44] The discrepancy could leave the door open to more monetary easing or, at the very least, no rate hikes. A loose money policy winds up hurting the dollar as more greenbacks in circulation make them worth less in turn lifting gold and silver, perceived as safer forms of money. Gold and silver don't always react inversely to the dollar, but today they will. ^[29] Taylor called it "the poor man's gold" and said it could also hit historic highs as investors flee an unstable paper market. James West, publisher of The Midas Letter, agreed that the worldwide counterfeiting of money is driving the demand for gold and, in his view to an ever greater degree, silver. ^[34] Evidence shows that speculation in gold and silver remains muted as seen in the Commitment of Traders reports and the total gold and silver ETF holdings ''' neither of which have shown huge increases or signs of '''irrational exuberance''' or investors '''piling in.''' ^[3] Today's Gold session covered a $14.70 range as Traders and Investors awaited the results of today's FOMC Meeting. ^[36]

In terms of dollars with 2010 purchasing power, that peak was $1,892 per ounce. Another 23 percent upward and those old investors will have recovered all their purchasing power. ^[45] We Gold bugs remember that just 3 ½ months ago prior to The Egyptian ouster of Hosni Mubarak Gold was struggling to hold $1310.oo per ounce. $220 plus rally since then. ^[36] The gold miner, who just diversified into copper, made $1.01 a share, in line with estimates and produced 1.96 million ounces of gold at cash costs of $437 an ounce. Barrick is reportedly on target to hit its full year production guidance of 7.6 to 8 million ounces. ^[29] Immediate-delivery gold gained as much as 0.4 percent to $1,533 an ounce, and traded at $1,530.13 at 1:46 p.m. in Singapore. ^[30] Total ETF gold holdings at 66.55 million ounces are worth nearly $100 billion at $1500/oz ($99,825,000,000). ^[3] By late Thursday on the London Bullion Market, gold jumped to $1,535.50 an ounce from $1,504 the previous Thursday. ^[25] Gold support at $1,500.00 an ounce, resistance at $1,519.00 an ounce and 14-day RSI at 86.7. ^[14]

Spot gold hit new records during Bernanke's press conference and notched fresh highs during Asian trade, peaking at $1,533.40/oz. ^[47] Gold surged to a fresh intraday record peak of $1,530 before settling at $1,517 following the FOMC decision to hold rates steady. ^[37]

"A lot of gold buyers will be waiting for signals from the Fed," Bernard Dahdah, a London-based analyst at Natixis Commodity Markets, told the publication Whims "on currency and interest rates could highly affect the price of gold. ^[10] Going into the April Fed meeting, rising commodity prices and hawkish commentary from a vocal minority of Fed Presidents increased expectations for the central bank to at least tone down the level of dovish language in the FOMC statement.'' No such developments occurred, as the Fed left in the "extended period" phrase with regard to near-zero interest rates and chose to complete QE2 as originally planned.'' ^[23]

'''The enemies of gold are rising interest rates and a balanced budget,''' said Pento of Euro Pacific Capital in New York. ^[1] "Gold is still bullish, with the QE2 (second round of quantitative easing) to be completed on schedule and interest rates to stay low until at least end of the year," said a Hong Kong-based dealer. ^[4] Low interest rates have kept the dollar weak against other currencies. That has contributed to higher oil prices, since oil is priced in dollars. ^[5]

The yellow metal surges to a record high as the Federal Reserve leaves interest rates near zero. ^[29] The dollar fell to the lowest since December 2009 against the euro yesterday after the Federal Reserve kept borrowing costs at a record low. ^[33] Sales of silver coins have rocketed since the financial crisis. Some of this is linked to fear of the damage to the dollar from the Federal Reserve'''s ultra-loose monetary policy. ^[3] April 27 (Bloomberg) -- Axel Merk, president and chief investment officer at Merk Investments LLC, discusses the U.S. dollar and the outlook for Federal Reserve policy. ^[18] The Federal Reserve released their FOMC Policy Statement yesterday and for the first time ever, Ben Bernanke held a conference call. To show the lack of faith in him and the Federal Reserve, the Dollar crumbled. ^[49]

With the dollar under pressure and its inverse link to gold strengthening for the first time in a week, the bullion price was set for a second day of gains, although a string of public holidays in the United Kingdom restricted volumes. ^[3] The exact price of gold in dollars may not be as meaningful a number, according to Taylor, as how much an ounce of gold will buy. ^[34] The possibility of Japan being downgraded has seen the yen join the dollar under pressure and gold has risen to over 124,000 Japanese yen per ounce, some 2% below the record nominal high just over 126,000/oz. ^[3] Gold may extend gains from a record as the declining value of the dollar prompts more demand for the metal as an alternative investment, a survey found. ^[33] Gold in particular is seen as a safe store of value in troubled economic and political times and has been smashing records in recent weeks in response to rising global inflation. ^[25]

"No Fed action with advances of inflation is almost as bullish for silver (and gold) as having the Fed decrease rates," argues Mark Williams, author of Uncontrolled Risk: The Lessons of Lehman Brothers and How Systemic Risk Can Still Bring Down the World Financial System. Adam Grimes, director of tactical investments at Waverly, says he's not really paying that much attention to the Fed. "It's very rare that the market is completely caught off guard by something like this," Grimes says. Grimes recently sold out of his silver trades as the market volatility showed too much risk. ^[29] The knowledge amongst the participants regarding the fundamentals is in stark contrast to many so-called financial or market experts in the press who continue to be misinformed regarding the gold and silver markets (see news). The knowledge amongst the participants is also in stark contrast to much of the western public (particularly in European countries), many of whom continue to believe that '''cash is king''' and remain unaware that they are very exposed to sovereign debt default risk, currency debasement and inflation. ^[1]

While there are some inflation concerns similar to what we had back in 1980, the reality is that metals are going up as an alternative asset featuring gold, and by proxy silver," said Bill O'Neill, partner at commodities firm LOGIC Advisors. ^[8] Probably it is not in a hurry to follow the path of crude oil. Another key point is the correlation between the prices on crude oil and gold. It hasn't reached its limit as well. It is not a secret that both the assets are used to ensure against inflation. They are correlated with each other. ^[39] Today the price is 3,4 times as big. Such an increase cannot but suggest: Maybe this is the best gold can do? Maybe the prices will start rapidly falling down? The similar picture could be seen in the crude oil market in 2008. ^[39] In August 2008 crude oil made a price sharp collapse while gold kept growing in value - the ratio exceeded the average level once again. Both crude oil and gold have been growing in price against the background of global economy recovery while the ratio has been below the average. ^[39]

MUMBAI: Gold prices climbed a new peak at the domestic bullion market here today at Rs 22,145 per ten grams on renewed stockists' as well as stray local buying triggered by surging global cues. ^[16] The deposits rose by 68.7 billion won from the end of last year. If people put their money into such gold-buying deposits, they can invest in the equivalent amount of gold in accordance with changes in gold prices. ^[3] The bottom line: once production increases, it stays high for years to come. Forecast of Gold Prices : It's hard to predict exactly when the price of gold will start to decline, but it will come down. ^[45] The weekly gold survey started almost seven years ago and has forecast prices accurately in 207 of 360 weeks, or 58 percent of the time. ^[33]

Based on that number, the nominal price of gold could even go down, but the relative absolute purchase price could continue to rise. "The real price of gold will remain high for a long time to come," he said. ^[34] Gold and silver declined yesterday for the first time since April 12 th. Currently they show moderate rises as they seem to bounce back from yesterday's falls. ^[43] Or, at the very least, silver will rise faster than gold so that's where you want to be. A squeeze this time would be a twist on the 1980 sting. ^[21]

If the People'''s Bank of China is involved ''' profit may not be the end game, rather the positioning of the Chinese yuan as the new reserve currency through use of gold and silver bullion reserves. ^[1] Most gold is locked away in Fort Knox and other central bank vaults but silver is footloose and fancy free with about a fifth recycled from scrap. ^[21] In 2010, central banks became net buyers for the first time in two decades, adding 87 metric tons in official-sector purchases by countries including Bolivia, Sri Lanka and Mauritius, according to World Gold Council. ^[16] Previously Central banks used to sell their holdings into any gold rally, both to dampen enthusiasm and raise cash. This time its different. ^[31] Just as most of the world's gold is locked away in central banks, there are silver-only managed funds. These holdings are highly volatile depending on how many buy into or sell out of the fund. ^[21] European central banks and the International Monetary Fund sold 53.1 metric tons of gold so far in the current central bank gold agreement which began September, the World Gold Council said. ^[1]

'''Until monetary policy changes, you'''re going to continue to see gold go up,''' said Michael Cuggino, who helps manage $12 billion at Permanent Portfolio Funds in San Francisco. ^[1] '''Silver'''s run is related to the rise in gold,''' said Michael Cuggino, who helps manage about $12 billion at Permanent Portfolio Funds in San Francisco. ^[40]

Haber will be looking to see if that expectation decreases tomorrow. "With gold going up $20 and the dollar getting hit again. the interpretation was that it's zero for as far as the eye can see." ^[29] Gold for immediate delivery gained as much as 0.7 percent to an all-time high of $1,538.47. ^[19] The most-actively traded gold contract, for June delivery rose $25.20, or 1.6%,. ^[41] Palladium for June delivery rose $10.75, or 1.4 percent, to $786.05 an ounce. ^[27] In platinum group metals, platinum XPT= gained 0.8 percent to $1,834.40 an ounce, while palladium XPD= rose 1.3 percent to $773 an ounce. ^[8]

After the settlement, the metal reached a record $1,569.80. The price surged 8.1 percent in April and advanced 3.5 percent this week, the most since February 2010. ^[40] Silver has surged 11 percent in just the last two days, even after Monday's technical failure that almost sent prices toward $50 before pulling back sharply. ^[8] If bullion stays where it is, the silver price would have to jump to $100 to get to the 15:1 ratio. ^[21] "The recent sharp increase in volatility is an indication of the increasing nervousness of market players and could be a sign that the rally in the silver price is approaching an end," said Commerzbank in a note. In fundamental news for silver, MMTC, India's largest bullion importer, plans to double its silver purchases this fiscal year to 1,500 tonnes, to catch up with exploding investment interest. ^[3] The theories are not mutually exclusive and may be true. Chinese, Russian and other private interests may be cornering the physical market in an effort to end manipulation of the silver market by Wall Street banks in order to ensure the silver price rises very sharply and creates significant profits on their silver bullion holdings. ^[1] SILVER OPTIONS SEEN BULLISH On the silver options front, heavy buying of call options indicated investors continued to bet silver prices would rise further. ^[8]

Traditionally, investors turn to gold at times of uncertainty and rising prices. ^[26]

The real answer may be somewhere in between. It's important to remember that although gold and silver are often viewed in tandem, the forces that drive their spot prices are actually quite different. ^[35] The gold to silver ratio is often discussed and used to determine where the price of each should or could be considering the ratio. ^[44]

The value of 15 ounces of silver is equal to the value of one ounce of gold. ^[44] The 1 billion ounces of silver above the ground compares with 5 billion for gold. ^[21] The ratio could be interpreted as one troy ounce (31.1 gram) of gold is worth 33.35 troy ounces of silver. ^[43] Spot gold was bid at USD 1,536.30 an ounce in early trade, while silver was bid at USD 48.86 an ounce. ^[16] Oh, gold is prettier, too. Historically, an ounce of gold bought 15 ounces of silver, a ratio of 15:1 - though when they both peaked in real terms in 1980 it was 17:1. Today it's 33:1. ^[21]

Silver barely moved, standing at 48.28 an ounce by 0017 GMT, having rallied to a record at $49.51 an ounce on Thursday. ^[7] The metal for immediate delivery earlier today climbed to a record $1,540.85 an ounce. ^[27] Since Monday'''s $49.70 an ounce peak ''' close to the record just above $50 reached during the Hunt brothers''' episode ''' the metal is off more than 8%. ^[3]

The rally is '''very different''' from the surge in the late 1970s, when the Hunt brothers tried to corner the market, and in 1980, when prices touched a record $50.35 an ounce, Frank McGhee, the head dealer at Integrated Brokerage Services, said at the conference. '''There is no manipulation going on in this market,''' McGhee said. '''It does not take a lot to stop the market until this market decides to go. ^[1]

Platinum futures for July delivery gained $13.80, or 0.8 percent, to $1,819.20 an ounce. ^[18] U.S. futures for June delivery GCv1 were last up 0.3% at $1,507.30. "It's consolidation. ^[3]

U.S. crude oil for May delivery settled at $112.76 a barrel, gaining 55 cents. ^[6] In other Nymex trading, heating oil rose 2.08 cents to settle at $3.2481 per gallon, gasoline rose 5.1 cents to $3.3582 per gallon and natural gas fell 1 cent to $4.377 per 1,000 cubic feet. ^[5] In London, Brent North Sea crude for delivery in June rose 48 cents to settle at $US124.14 a barrel as trading resumed after a four-day Easter holiday weekend. ^[12]

Today, the Dollar is falling again with the PowerShares DB U.S. Dollar Index Bullish (NYSE:UUP) trading at $20.97, -0.05 (-0.24%). ^[49] RealMoney Silver: Get Doug Kass's exclusive trading diary + 4 of TheStreet's top premium services including Action Alerts PLUS and RealMoney -- all on one streamlined page. Stocks Under $10: Break into the market with small- and mid-cap stocks. all $10 or less! David Peltier tells you exactly which low-priced stocks he's buying and selling. ^[28] Stewart Thomson, a retired Merrill Lynch broker and author of Graceland Updates, wrote on 321Energy Tuesday that while gold has risen from $1,300/oz. -$1,500/oz., the public has actually become less interested in gold and gold stocks because "this is a crisis and greed will play a diminishing role, while fear plays an exponentially increasing role." ^[34] Gold mining stocks moved higher alongside the gold price heading into Friday'''s opening bell on Wall Street. ^[22] If GFMS is correct, expect the prices of gold stocks and funds to drift lower over the summer. ^[35]

The risks of global inflation are raising expectations that the price of gold might rise as a tool of hedging inflation risks, market experts say. ^[3] The FOMC evidently see's the U.S economic recovery to be progressing at a moderate pace and inflation continues to rise due primarily to the sky rocketing Crude Oil ]] Crude Oil prices. ^[36]

Crude oil prices rose in choppy trading after government data showed declining U.S. gasoline stockpiles. ^[6] Probably any U.S. citizen knows the reasons why the fuel keeps growing in price: imperfect engines, the OPEC, the amount of cars… or even China. Obviously most of these factors do affect the prices but it is ridiculous to consider them as the reasons for the fuel crisis. Who does really manipulate the prices on crude oil and oil products? As we have just said, these are speculators and the U.S. Fed Reserve. ^[39]

For the last couple of decades the ratio of gold and crude oil prices has been around 15.4. ^[39]

The current correlation of USD/YEN and gold prices (daily percent changes) is at 0.159 - a moderate strength positive correlation. ^[43] Surging gold prices have forced South Koreans to cut down on traditional rings given to mark the first birthday of the children of friends and relatives, making jewelers to come up with a lighter and cheaper alternative to boost sales. ^[3] Sentiment only goes so far. Some parents have actually sold the rings engraved with their infant's name to take advantage of rising gold prices. ^[3] MUMBAI: Gold prices bounced back sharply to hit fresh all-time high at the domestic bullion market here today on emergence of strong stockist and investment-driven buying at lower levels influenced by sharp overseas rally. ^[15] In the previous months the correlation was negative, i.e. as the Yen gets stronger against the USD, gold prices also increased. ^[43] The entire world is still concerned about whether gold prices turn out to create another price bubble. ^[39]

The Fed offered no surprises with its latest FOMC rate decision and gold and silver were rising as a result. ^[28] '''There'''s no hint whatsoever of the Fed being close to raising rates, so people are buying gold.''' ^[18]

There is also genuine end-user interest: Indian consumers, priced out by the rally in gold, are increasingly turning to silver. U.S. consumers too have been doing their bit. ^[3] Thursday's rally carried over from Wednesday, when gold and silver popped 1% and 2%, respectively and rose even higher in after-hours trading. ^[11] U.S. silver futures saw record volume on Monday, with over 300,000 lots changing hands, with another 170,000 trading by 3:20 pm on Tuesday. ^[12] Silver has risen by almost 150% over the last year and by 50% since January. The gold:silver ratio, having this month fallen below 40:1 for the first time since 1983, fell to 32:1 on Monday. Trading volumes, which hit record levels this week, have tripled over the same period. ^[1]

Gold has climbed 33 percent in the past year, and silver has more than doubled. ^[40] Year to date, silver was up almost 60 percent, currently the best-performing commodity, sharply above gold's 8 percent gain. ^[8]

There is also a decline in correlation of the daily percent changes of gold and silver as it is currently at +0.69. ^[43]

Gold and silver are tentatively lower this morning despite the dollar and especially the yen being under pressure. ^[3] From Macro economic perspective there was no recent news that could have affected the actual silver and gold market. ^[43] AS SILVER becomes the new gold, the challenge is finding ways of investing in it. ^[21]

Most continue to be prudent and continue to maintain a core holding (for portfolio diversification and financial insurance purposes) but there are definitely concerns amongst some of a bubble. Others have taken profits on certificates and bought gold and silver coins and bars (in secure storage or delivered). Recently orders for coins and bars have outweighed those for certificates and there is definitely an increased preference for physical coins and bars and for taking delivery. ^[3] I speculate we will probably continue to see moderate rises in gold and silver in the next day or two. ^[43] The cheap money trend will continue, but without anyexcess money. "It's status quo (for gold and silver)," says Bob Haber, CEO of Haber Trilix. ^[29] Prior to doing so, the money was based largely on the British system of pounds, shillings and pence. Use of a variety of other foreign coins, made of both gold and silver, found no favor amongst merchants and citizens alike as it was cumbersome to calculate and convert relative values of each in their daily transactions. ^[44] The majority of the western public remain unaware of gold and silver as investments and as stores of value. ^[3]

Which is used in computers, mobile phones, cars and medicine? Silver. The wonder is that it's not worth more than gold except that while there might be more demand for it, there's also a lot more of it around. ^[21] Whether it will happen again, only time will tell. If it does, that's probably a good sign that it's time to sell silver or trade it all for gold. ^[44] We, at The Gold Report, will be watching to see if precious metals reach the high bars being set. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part. The GOLD Report does not render general or specific investment advice and does not endorse or recommend the business, products, services or securities of any industry or company mentioned in this report. From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise. ^[34] Prepared by GFMS Ltd., a highly respected London-based precious metals consultancy firm, the report says that 47 million ounces of silver were used by the photo voltaic industry in 2010, 36 million ounces by the automotive sector, 22 million ounces in the production of computers, and 13 million ounces in cell phones. ^[35]

"On average, monthly sales of dol (first birthday) rings is only one-tenth compared to last year," said Yoo Dong-soo, chairman of the Korea Precious Metals Association. A new one-gram ring, much lighter than the customary baby gift weighing an eighth of an ounce or 3.75 grams, would help lift sales and preserve the long-standing tradition, he added. ^[3]

"There will be no speed about reversing policy. (which is) good for gold," said Steel, who is HSBC's precious metals analyst and senior vice-president. ^[6] Gold might hold pride of place among precious metals but there is lots to like about its shiny sidekick, writes David Potts. ^[21]

A falling dollar pushes precious metals higher as traders see the Fed weak on inflation. ^[31] '''Ultimately the best thing we can do to create strong fundamentals for the dollar in the medium term is first, keep inflation low, which maintains the buying power of the dollar, and second, create a stronger economy,''' Fed Chairman Ben S. Bernanke said on April 27. ^[1]

Bernanke said yesterday that the central bank would maintain record monetary stimulus after ending large-scale bond purchases in June to bolster the economy. '''The tone from the Fed remains dovish with a continued focus on maintaining growth in the economy and conviction to complete QE2,''' said Daniel Brebner, a London-based analyst at Deutsche Bank AG. '''This is resulting in further weakness in the dollar. ^[19]

Anyone buy a computer lately? The price changes are predominantly changes in relative prices, meaning the price of one good relative to other goods. They get translated into general inflation only if the central banks of the world print more money. (Here in the United States, the money supply has risen less than five percent in the past 12 months.) ^[45]

Silver remains in backwardation and the possibility of a Comex default cannot be ruled out ''' especially as silver bullion inventories are very small vis-a-vis possible capital allocations to silver in the coming weeks and months. The possibility of an attempted cornering of the silver market through buying and taking delivery of physical bullion remains real and would likely lead to a massive short squeeze which could see silver surge to well over its inflation adjusted high of $140/oz. ^[1] Silver support at $43.75 an ounce, resistance at $50.00 and 14-day RSI at 80.9. ^[14] Silver briefly climbed to within a whisker of $50 an ounce, eclipsing the peak hit when Texan brothers William Herbert and Nelson Bunker Hunt sought to corner the silver market three decades ago. ^[8] Silver (-SI) briefly surged above $49 an ounce before falling back below $48. ^[31]

May silver settled up $1.562 to $47.52. Both contracts had traded above silver's record close of $48.70, set on Jan. 17, 1980, but didn't breach the intraday high of $50.35, set a day later. ^[31] The $22.7 billion (total silver ETF holdings) is a small number when compared to the huge sums of money at the disposal of high net worths, hedge funds and sovereign wealth funds. ^[3] Platinum XPT= was last up 0.4% at $1,804.49 an ounce, while palladium XPD= was flat at $750.00. An increasing number of South Korean bank depositors are putting their money into foreign-currency denominated deposits or gold-buying deposits this month, data showed Monday, pointing to a growing appetite for safe assets. ^[3] There is, however, no logical reason for $50 an ounce to be anything more than a psychological issue for investors. It would do no harm for investors to at least pause to take stock before even considering another push higher. ^[3]

"I would say that for gold I am still looking for it to hit $1,600 this year." ^[26] '''Overwhelming support by the shareholders of both predecessor companies has created a new leading intermediate global gold producer the only producing company entering this important segment of the gold sector within the past year.''' ^[22] '''China is out to have more gold than America, and Russia is aspiring to the same,''' McEwen said yesterday in an interview in New York. ^[1] Rather inconveniently, the first and biggest silver fund, iShares's SLV, trades on the New York exchange. ^[21] On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for June grew to $112.64 a barrel from $111.71. ^[25] In New York on the NYBOT-ICE, cocoa for July climbed to $3,277 a tonne from $3,084. ^[25]

COFFEE: Coffee prices struck 34-year highs for a second week running on tight supplies, reaching 303.40 cents a pound in New York. ^[25] Nothing like a huge run-up in price to get old mines back in operation. Old mines being reopened was pointed out in this New York Times article. ^[45] OIL: World oil prices gained, with New York crude reaching 2.5-year highs, as traders tracked the cloudy economic picture in the United States, the biggest crude-consuming nation. ^[25]

Group, said today at the Bloomberg Link Precious Metals conference in New York. '''The fundamentals are really tight,''' she told the audience. ^[1] Let us reiterate a Comex default on delivery of precious metals and specifically of silver bullion bars is far from '''noise'''. It is of significant importance and that is why we have covered its possibility for some months. ^[1] After the close of the day session the precious metal sky rocketed producing yet another all-time high in the June Globex contract as it traded (AS OF 2:00pm) $1525.80. it appears traders deciphered the FOMC's Statements as generic and concluded the state of the U.S economy will remain "STATUS QUO". ^[36] Much of the drop-off in precious metals was driven by traders who wanted to cash in on high prices, Sanchez said. ^[5]

"The prospect of the highly expansionary monetary course being adhered to brought the dollar under strong pressure, and precious metals were the main beneficiaries," analysts at Commerzbank wrote in a note to clients. "Demand for these as a store of value was substantial." ^[25] Analysts at Commerzbank stated that in view of the ultra easy monitory outlook dollar had been under the strong selling pressure, however, precious metals were the main recipients of the situation raised. ^[24]

Neither metal would then look so precious because there would be a rush back into U.S. dollars. ^[21] Analysts also said the falling U.S. dollar had helped bolster the metals value. ^[26]

The deposits rebounded in February after falling for the fourth consecutive month in January. The rise came as customers try to put their money into such deposits at a time when the value of the dollar remains weak. The South Korean currency, which hit a 32-month high to the dollar last week, has risen about 5% per the greenback since the start of this year. ^[3] Silver is up some 45 per cent, rising so fast, in fact, that the stronger dollar is barely touching it. ^[21] Silver is primarily an industrial metal, with about 60 per cent of consumption used in the manufacture of a wide range of products. ^[35] Production of silver from mines is increasing only about 2.5 per cent a year, according to the Silver Institute. ^[21] Note there's a difference between sterling (which is 92.5 per cent pure) and fine silver (99.9 per cent). ^[21]

Wheat futures for May on the Chicago Board of Trade soft settled down 34-1/4 cents at $7.77 a bushel. Wheat prices closed below key support at their 100-day moving average. ^[6] Silver contracts traded on the Comex futures market saw immense turnover and moved up to challenge levels reached during the commodity's most recent price spike. ^[47] Having considered the above-mentioned we can conclude that in the near future gold will stay a "safe heaven asset", which cannot but reassure investors. At this point the futures contract of gold (GC) continues its rally. It has already updated another local high. ^[39] '''The sinking dollar is driving people to the gold market,''' said Lim Han Jo, a Seoul-based trader with Tongyang Futures Co. ^[27] "Going forward, the direction of the dollar is still one of the main factors influencing gold," Ong Yi Ling, Singapore-based analyst with Phillip Futures, told Bloomberg. ^[9]

The first birthday is a huge ceremonial occasion in Korean tradition that includes a birthday party. During the party, a baby, sometimes wearing gold rings, selects an item from among things such as thread, a pencil or money to predict their future, while families and guests watch. "The one-gram ring sounds just doable for both party hosts and guests, we don't have to feel it's a burden," said Park Su-yeon, a 34-year-old mother who's planning her baby's first birthday party in May. ^[3]

In March 2011, the first full month of combined production, Alacer Gold produced 37,040 gold ounces. This represents an annualized rate of more than 440,000 gold ounces, which is well above the company's 2011 target annualized production rate of 400,000 ounces. ^[22] Total gold production during the quarter came in at 91,259 ounces, while gold reserves increased to 5.7 million contained ounces. ^[22]

Due to the tsunami attack that struck Japan back in mid March, it could be that the low correlation of gold and Yen have something to do with the decline in Japan's role in the gold and silver market. ^[43] The chance of a squeeze has some analysts suggesting selling gold and reinvesting the proceeds in silver on the grounds one has peaked and the other can only rise. ^[21] The Federal Funds rate would have to rise to '''Volcker''' levels before gold enters a bear market, said Gold Corp.''' ^[1]

Barrick Gold ( ABX.TO ), the world's largest gold miner, reported a 22 percent increase in quarterly profit on Wednesday, driven largely by a surge in bullion prices. ^[14] "Right now, the continuous dollar weakness keeps supporting prices above $1,500, but the mark should be carefully watched," according to an email from Eugen Weinberg, head of commodity research at Commerzbank in Frankfurt. ^[10] The metal has nearly doubled in price since late 2008 and has risen almost without interruption from just below $300 in 2001. ^[13] Benchmark copper on the London Metal Exchange closed down $224, or 2.2 percent, at $9,321 after stockpiles of the metal at warehouses monitored by the LME hit 10-month highs. ^[6] By late Thursday on the London Metal Exchange (LME), copper for delivery in three months dropped to $9,384 a tonne from $9,648 on Thursday the previous week. ^[25]

Silver surged 3.4% yesterday to settle at a 31-year nominal high, and rose by $1.55 on the day. ^[1] July copper fell 9.1 cents to settle at $4.228 a pound, July platinum rose $13.80 to $1,819.20 an ounce and June palladium rose $2.40 to $758.10 an ounce. ^[5] Shares of Dow Chemical (DOW) climbed 2% to $40.71 after the company beat estimates with adjusted earnings of 82 cents a share on sales that rose 20% to $14.7 billion. ^[31] Exxon Mobil's first-quarter earnings rose to $2.14 a share, beating expectations for $2.06. The oil giant's revenues of $114 billion were less than analysts estimated. (They also were about the same as the gross domestic product of Hungary and Ukraine.) ^[31]

Crude oil (-CL), which had risen to as high as $113.97 a barrel, settled up 10 cents to $112.86. ^[31] COMEX benchmark May copper finished 1.60 cents higher at $4.3190 per lb. ^[12] In contracts for July delivery, corn fell 13.5 cents to settle at $7.5925 a bushel, wheat fell 35 cents to $8.12 a bushel and soybeans fell 4.75 cents to $13.845 a bushel. ^[5] The contract for April delivery, which stops trading after the close Wednesday, was up $2.60, or 0.2%, at $1,505.60. ^[46] In response to the weaker Dollar, the SPDR S&P; 500 ETF (NYSE:SPY) is trading at $135.86, +0.19 (+0.14%). ^[49]

Try $US2200 in today's dollars. Or $2790 since Australia's inflation has been higher still. ^[21] What monetization means is that, down the road, we will have more inflation," said Robert Lutts, chief investment officer of Cabot Money Management, which oversees more than $500 million in client assets. ^[8]

The speculative demand for gold has historically been fueled by inflation fears. ^[45] Demand will be strong, especially from investors and governments, due to rising inflation expectations and the on-going sovereign debt crisis in Europe which, says GFMS, will eventually spread to the U.S. and Japan (this report came out before Standard & Poor's downgraded the U.S. debt rating). ^[35] The Gold ]] Gold ]] Gold Report's expert contributors explain what this milestone means for investors going forward. ^[34] The report also notes that as the metal becomes more expensive, manufacturers will look for cheaper alternatives. Investors should pay close attention to this report, which is the most comprehensive and analytical study I could find on the prospects for silver. ^[35]

Being years away from generating cash flow, we see no need to rush in,'' Canavan says. Perilya (PEM) has silver mines at Broken Hill and in the Dominican Republic, which between them produce a combined 2 million ounces a year, but it also mines other base metals. ^[21] Although Australia has the largest reserves of silver, there's really only one mine and then the rest. That's BHP Billiton's Cannington in north-west Queensland, one of the world's biggest silver/lead mines, which produces 42 million ounces a year. ^[21]

Haber thinks the metals are still overbought in the short term, especially silver, and that the markets will have to "work that off." Haber points out that "as of this morning the market was expecting rate hikes next year by about 50-60 basis points." ^[29] There are reasons enough to think silver'''s rally could fade. Fed '''fears''' should ease if, as expected, it confirms today that it will end its quantitative easing in June, even if no rate rises are yet in sight. ^[3] The Fed said it would buy $600 billion in U.S. Treasuries through June. ^[1]

A U.S. jury found that the Hunt brothers conspired to manipulate the prices of silver in 1979-80. Soaring prices hurt the bottom line of certain manufacturers, including photography company Eastman Kodak ( EK.N ), which said on Thursday a hike in raw material costs, particularly silver, led to a decrease in its film business revenue. "We are indexing our contracts, we are hedging, and we are moving as fast as we can with the part of the portfolio that is not silver-dependent," Chief Executive Antonio Perez told analysts, explaining its strategy to manage prices. ^[8] '''We look for a pullback in prices in the short term amid continued volatility,''' analysts led by London-based Dan Smith said in a report today. Count references to the Hunt brothers in leading newspapers and the results for 2011 look not unlike the stratospheric rise of silver ''' the market they infamously tried to control in 1980. ^[3]

With the 3,400-tonne rise in LME copper inventories on Tuesday, stocks have risen in 13 of the last 15 sessions. Data showing new orders for durable U.S. manufactured goods rose more than expected in March failed to offset the gloom of a market enduring one of its weakest seasonal demand periods, analysts said. ^[6] In previous issues, we dealt with major statistics for the stock market of Russia and the U.S. and information support, codirectional movement of RTS and S&P500; futures, some aspects of using relayed stock market data in intraday trading as well as principles of creating medium-term, long-term and investment strategies. ^[39] Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results. You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. ^[10]

As well as short-sold futures contracts, the deficiency arises from forward selling, leasing and ''the cumulative issuance of unbacked silver bank certificates''. ^[21]

A recent article in the Financial Times suggested that private or state interests with very deep pockets are attempting to corner the silver market. Bizarrely, this massive story which mooted the possibility of Russian billionaires, Chinese traders and even the People'''s Bank of China and other central banks secretly buying silver, has subsequently been barely reported or commented on. ^[1]

Leveraged exchange-traded funds, which allow traders to bet against silver, are also seeing record trading volumes. ^[1]

In Europe, gold shied away from hitting fresh record highs on the back of a weak dollar. ^[16] Even if you feel the pinch after next week's budget, whatever you do, hang on to the family silverware. While gold is going gangbusters, breaking all records except its own personal best, it hasn't done too well in Australian dollars. ^[21]

Assets held in exchange-traded products backed by gold stood at 2,069.98 tons yesterday, compared with record holdings of 2,114.6 tons touched in December, according to data compiled by Bloomberg. ^[30]

The dollar continued to slide against several major currencies after new economic data was released showing that U.S. growth had slowed in the first quarter of 2011 to 1.8%. ^[26] A weak U.S. currency makes commodities priced in dollars cheaper for holders of rival currencies, pushing up the demand for the raw materials. Commodities trading was meanwhile shortened this week, and last owing to the Easter celebrations and britain's extra break on Friday due to its royal wedding. ^[25] Over the past year, the U.S. dollar has dropped against the euro and the pound by 12% and 9% respectively. ^[26] The U.S. Dollar Index, which measures the greenback against a basket of currencies, was down 0.4% to 73.31. Its low of 73.05 was the lowest level since July 25, 2008. ^[31] The strong performance had seen after the U.S. dollar went up merely versus the Japanese yen, however against Chinese yuan it eased to a fresh low, as the currency was ready for the seventh consecutive week of gains as compare to the greenback. ^[24]

The dollar index declined to a three-year low, as the euro scaled fresh 16-month peaks against the greenback ahead of the outcome of the Federal Reserve meeting. ^[20] The greenback headed for the fifth consecutive monthly decline against a basket of six major currencies. The Federal Reserve signaled this week that borrowing costs will remain at a record low for an extended period. ^[40]

Analysts expected any gains in copper to be limited ahead of the Federal Reserve's policy announcement and Fed Chairman Ben Bernanke's press conference due on Wednesday. ^[12] Bad weather and higher fuel prices may also have depressed the economy as well. Many economists had been trimming their estimates of first-quarter growth. Federal Reserve officials trimmed their 2011 forecasts to a range of 3.1% to 3.3%. ^[31]

Palladium was little changed at $768.75 an ounce, while platinum fell 0.3 percent to $1,821 an ounce. ^[30] Four local banks including top lender Kookmin Bank drew US$12.6 billion in foreign-currency deposits as of Thursday, up $149 million from the end of March, according to industry data. ^[3] Demand for gold-buying deposits in South Korea has risen, reflecting the popularity of gold as a form of investment, industry watchers said. Such deposits came to 269.1 billion won (US$248.9 million) as of Thursday, up 13.6 billion won from the end of the previous month, according to Shinhan Bank. ^[3] Demand for Gold : The big surge in gold demand recently has been speculative, but first let's cover usage. ^[45]

Gold in euros has risen 2% in April. It will be interesting to see if euro gold replicates the performance of April and May last year when eurozone sovereign debt concerns saw gold rise to '''825/oz to over '''1,000/oz prior to a correction. ^[1] Sovereign debt risk remains elevated in the eurozone and the cost of servicing peripheral nations''' debt continues to rise. The cost of insuring debt sold by Greece, Portugal and Ireland rose to records this morning as have bond yields in Greece which have leapt to new records ''' over 16% on the 10-year and 25% on the 2-year. ^[3]

The Fed also said the rise in energy and commodity prices, though adding to inflationary pressure, would be "transitory". ^[6] We were headed into a recession in 1980, with fed funds at 13.8 percent, mortgages at 12.8 percent, and everyone knew it was an awful time to buy stock. ^[45] An easier, more direct way of investing in silver is through an exchange traded fund, a managed fund that trades on a stock exchange. ^[21]

Admire it or stick it in a vault as a store of value and there's not much else you can do with it. Silver is both a store of value and a handy metal around the home in its own right - with demand almost split down the middle. ^[21] '''We'''re in a legitimate market driven by financial interest in silver and strong industrial demand,''' Chief Executive Officer Dennis Wheeler said today at the Bloomberg conference. ^[19]

''The silver market is not at all analysed by mainstream investors and remains very much overlooked as an investment opportunity,'' says the editor of Sound Money, Sound Investments, Greg Canavan. ^[21] The metals have gained for 10 out of the past 11 sessions, with Thursday's jump coming as investors sought a hedge against inflationary pressures as well as a safe place to park cash after separate data revealed U.S. jobless claims unexpectedly jumped. ^[42] Now investors are buying up the contracts in light of the weaker dollar. Other metals were mixed. ^[5]

A Comex default would have massive ramifications for precious metals markets, for the wider commodity markets, for the dollar, fiat currencies and our modern financial system. ^[1] The futures will be the bourse'''s first product, and there are plans for industrial and other precious metals, energy, agriculture and commodity indices, it said. ^[3] Earlier, George Gero, vice president-global futures at RBC Capital Markets, said the precious metal'''s recent purchasers were '''weak buyers''' who bought the commodity for '''momentum reasons.''' ^[1]

'''The dollar will continue to lose ground for the foreseeable future, so it only makes sense to be invested in precious metals,''' said Matthew Zeman, a strategist at Kingsview Financial in Chicago. ^[40]

One would want to look at worldwide monetary policy, which is not nearly as stimulative as U.S. policy. Certainly some prices are rising rapidly, but they are primarily commodities (such as oil). ^[45] The situation with crude oil was different: the prices grew in early 2008 and started falling after breaking above the high while being pressed by inflation. ^[39]

COCOA: Prices rebounded as the market tracked the situation in leading producer Ivory Coast. The country's new President Alassane Ouattara made his first visit to the presidential palace Thursday since taking power after the toppling of strongman Laurent Gbagbo. "Not only is the weather outlook shaping up to be more favourable for healthy cocoa harvests in Ivory Coast. the country confirmed that the first cocoa shipment has left the port since the seizure of its incumbent president," said Barclays Capital analyst Shiyang Wang. ^[25] Supply will increase substantially, but with a long time lag. What happened after that 1980 price spike? It took several years for production to increase, and then it zoomed. Stayed high even as prices were plummeting. ( Statistics here ) That's what happens in a capital intensive business. ^[45] In addition to the mines currently operating, there are plenty of mines that shut down in past years when prices were too low for profitability. ^[45]

"Unless we see the job market turn around quickly, interest rates will stay low for a long time." ^[4] Interest rates will stay low for an extended period of time, and there were no changes to policies or forecasts. ^[28]

SOURCES

1. Could Secret Silver Buys Lead to Comex Default? - Precious Metals - Resource Investor
2. PRECIOUS METALS: Precious Metals Mixed In Asia, Range-Trading - WSJ.com
3. Gold & Silver Bubble? Data Suggest Otherwise - Precious Metals - Resource Investor
4. Gold hits record, silver jumps on weak greenback
5. Gold, Silver Rise as Fed Keeps Interest Rates Low - ABC News
6. Gold hits record after Fed says low rates to stay | Reuters
7. PRECIOUS-Silver, gold near record; dollar wallows at 3-year low | Reuters
8. PRECIOUS-Silver hits record near $50, first time since 1980 | Reuters
9. Gold, silver futures to wrap up memorable April | Daniels Trading
10. Gold futures bounce back, near record prices | Daniels Trading
11. Silver Pops; Gold Surges on Inflation Fear - TheStreet
12. A roundup of key commodity markets
13. AFP: Gold rockets to nearly $1,570 as dollar sags
14. PRECIOUS-Factors To Watch on April 28 | Reuters
15. Gold rebounds to hit new high, silver also recovers - Economic Times
16. Gold climbs to new high, silver slips - The Economic Times
17. Gold futures revive, set record highs for second time this week | Daniels Trading
18. Gold Futures Surge to Record on Outlook for Sagging Dollar, Low U.S. Rates - Bloomberg
19. Gold Rises to Record for Second Day as Fed Maintains Rate, Dollar Slumps - Bloomberg
20. PRECIOUS-Silver rebounds, gold edges up ahead of Fed decision | Reuters
21. In-demand silver all set to soar
22. Gold Price Advances Toward $1,550, Hits New High | GoldAlert
23. Gold Price at New High Thanks to Fed, Bernanke | GoldAlert
24. Gold Rallied to All Time High on Traditional Safe Heaven « USA Market News
25. AFP: Gold extends record run higher, oil rises
26. BBC News - Gold hits new record high as US dollar weakens
27. Gold Climbs to Record as Dollar'''s Decline Spurs Investor Demand - Bloomberg
28. Gold, Silver Prices Soar on Fed Commentary - TheStreet
29. Gold silver soar on Fed commentary- MSN Money
30. Gold Climbs to Record as Bernanke Maintains Stimulus, Dollar Extends Drop - Bloomberg
31. Gold silver soar; Dow rises 72- MSN Money
32. Instant View: Silver rises to record, beats 1980 high | Reuters
33. Gold May Extend Gains From Record on Declining Value of Dollar - Bloomberg
34. What Does $1,500 Gold Really Mean? - Gold Matters
35. Where next for gold and silver? - Gordon Pape - Canada Report - Forbes
36. Daily Gold and Silver Report - Commodities & Futures
37. Gold Extends Record Peak Above $1,530
38. PRECIOUS METALS: Gold Continues Record Run As Dollar Drops - WSJ.com
39. Market Leader : News :: Gold: a price bubble or a safe heaven asset?
40. Gold Rises to Record; Silver Posts for Biggest Monthly Advance Since 1983 - Bloomberg
41. PRECIOUS METALS: Gold Surpasses $1,550/Ounce As Dollar Drops - WSJ.com
42. PRECIOUS METALS: Weaker US Data Push Gold, Silver To New Records - WSJ.com
43. Forex @ DailyFX - Guest Commentary: Gold & Silver Outlook 04.27.2011
44. Silver Races to Close Silver:Gold Ratio - Commodities & Futures
45. Is Gold a Bubble (2011 Edition)
46. PRECIOUS METALS: Gold, Silver Steady Ahead Of Fed Decision - WSJ.com
47. PRECIOUS METALS: Gold Hits New Records, Silver Rising In Asia - WSJ.com
48. FT.com / Commodities - Inflation worries send gold and silver higher
49. WSJ: The Debacle That Is The Dollar

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