This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Gold Prices Whipsaw Higher

Stocks in this article: GLD SGOL AGOL WITE NEM FRG

So now the question becomes is this rally for real or just another fake-out. Scott Redler, chief strategic officer at, says if the SPDR Gold Shares (GLD) closes above $131.50 "it is very bullish for gold."

Gold will have some headwinds on Friday. Big rallies tend to spur profit taking and the U.S. Labor Department will release the jobs number for January. Expectations are that the unemployment rate will rise to 9.5% while the private sector will add 163,000 jobs. Weekly initial jobless claims fell 42,000 in the week ending Jan. 29th which is also setting the bar high.

"The jobs number is going to be good and the stock market will react to the number very positively" says Randall Warren, chief investment officer at Warren Financial Service. Warren says gold will become even less attractive and will continue to lose its luster until the "doomsayers" get out of the market.

Gold has struggled with its role as a safe haven asset but better economic data in the U.S. is drawing investor interest away from gold and into stocks. "We are sort of stuck in the middle between this revolutionary situation that we are seeing in North Africa and the Middle East versus improved economic outlook here in the U.S.," says Will Rhind, head of U.S. operations for ETF Securities.

Rhind says an inflation jolt in western countries is really needed as a catalyst for gold prices. Central banks keep warning of inflation but haven't taken aggressive action in combating it. The European Central Bank kept interest rates at 1%, choosing to focus on growth and signaling that price increases aren't serious enough, yet, to fight inflation. Eurozone inflation rose to 2.4% in January. The euro's speedy decline, however, underscored that investors are skeptical of this approach and are concerned about rising prices.

Despite the SPDR Gold Shares (GLD) 53 ton decline in January, Rhind says its ETFS Physical Gold (SGOL) has seen minimal outflows and its newly launched ETFS Physical Asian Gold (AGOL) has added 40,000 ounces since mid-January.

Rhind attributes gold's recent decline as triggering modest investor selling of other assets to buy AGOL, which stores its gold in Singapore. The GLD is often used as a trading tool because it is bigger and more liquid with $52.7 billion worth of gold currently in the trust.

Gold's struggle could wind up being a blessing for platinum, palladium and silver, all precious metals associated with "recovery" as they are used in cars, construction and technology. ETF Securities has individual ETFs for all three metals as well as a ETFS Physical WM Basket (WITE) comprised of all three but more heavily weighted to silver.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs