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

Streible thinks that a third round of quantitative easing could be in the cards when the Federal Reserve's current program runs out in June. Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, backed up Ben Bernanke Tuesday by saying that inflation was "tame" in the U.S. despite the fact that individual prices for food and energy are rising.

Lockhart also said that tightening the Fed's monetary policy wouldn't help rising raw costs. A rate hike is definitely off the table, but is QE3 on the table?

More free money into the system could offset rate hikes from emerging market economies. "I think that gold prices are going to start to trend higher, it just might not be as aggressive until they get further confirmation of that," says Streible

Streible thinks new highs could be achieved, but for gold to reach the $1,500 and above level a complete euro meltdown would have to take place.

Trader Scott Redler, chief strategic officer at, says if the SPDR Gold Shares (GLD) holds $130.50 he will "add cash flow thru $132 for a continuation of what started last week." Shares were trading at $133.02.

Dominating the gold market was the news that JPMorgan Chase (JPM - Get Report) would now accept gold as collateral for lending. This puts gold in a category with triple-A rated Treasury bonds and other securities currently allowed to be used as collateral. Exchanges like the CME already allowed gold to be put up to meet margin requirements.

Gold received the boost as a currency after President Nixon abandoned the gold standard in 1971. Since World War II, countries allowed their currency to be set at a fixed rate against the dollar, which was then backed by gold. After this system was debunked, gold lost a pivotal identity and then became a safety asset that yielded no returns.

JPMorgan's move expands gold's usage as the investment bank looks to capitalize not only on hedge funds' gold reserves but on individual investors as well. Of the current above ground supply of gold, $3 trillion is bullion, half is held by central banks but the other half is held by high net worth individuals, according to Nick Barisheff, CEO of Bullion Management Group.

The World Gold Council is going one step further. The GLD sponsor has submitted a plan to Basel III for gold to be accepted as collateral by the international banking community, that it should be counted as a high quality, highly liquid asset.
2 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
SGOL $104.48 -0.48%
IAU $10.33 -0.58%
GLD $102.46 -0.47%
AGOL $108.93 0.05%
GFI $2.44 -3.56%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs