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
TheStreet Open House

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 T3Live.com, 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) 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

Select the service that is right for you!

COMPARE ALL SERVICES
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 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • 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