This Day On The Street
Continue to site
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

Gold Prices Pop, Silver Settles Above $30

NEW YORK ( TheStreet) -- Gold prices Tuesday shrugged off another rate hike from China as technical trading dominated the market.

Gold for April delivery added $15.90 to $1,364.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,368.70 and as low as $1,348.90. The spot gold price was up more than $11, according to Kitco's gold index.

The U.S. dollar index was slipping 0.11% to $77.96 while the euro rallied 0.37% to $1.36 versus the dollar. The euro was getting support from a successful bond auction in Greece, where the country raised money for 6 months at an average yield of 4.64% versus 4.90%.

Gold prices were unfazed by China's decision to raise key interest rates by 25 basis points, the third move since October 2010. China has been trying to take baby steps to fight rising inflation, which is currently 4.6%.

Typically an interest rate hike would drag on gold. As paper money gains more value, gold becomes a less appealing place to put money. Gold also does well in a negative interest rate environment, which is the interest rate minus the inflation rate. Using the one year deposit rate, even with the hike, China still has a negative rate of 1.6%.

China's New Year holiday ends today so it will be interesting to note if physical gold buyers in China will be deterred by higher rates or if rampant gold buying will continue. If today is any indication, Chinese buyers will jump into the market. Just by the mere fact that China is forced to raise rates because of inflation brings the buzz word into the foreground which is supporting prices.

The inflation validation "brought more funds to gold back after the $1,360 area was surpassed," says George Gero, senior vice president at RBC capital Markets. Not only were momentum buyers enticed by the rally but traders needing to cover their short positions also jumped at the opportunity.

Prices "aren't completely falling out which means there is some support in the market," says Phil Streible, senior market strategist at Lind-Waldock. "The 150 day moving average is holding strong ... I think the health of the gold investor has gotten a lot better over the last week."
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
IAU $12.42 -0.24%
SGOL $125.45 -0.30%
AGOL $108.93 0.05%
GLD $122.96 -0.23%
GFI $4.38 -4.16%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs