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
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Gold Closes Shy of Seven-Week High

NEW YORK (TheStreet) -- Gold prices flirted with seven-week highs Thursday as the direction of the yellow metal was caught between safe-haven buying and profit taking.

Gold for April delivery settled up $1.80 at $1,415.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,418.80, a high for 2011, and as low as $1,408.30 during Thursday's session. The spot gold price was down $1.40, according to Kitco's gold index.

"Gold buyers at $1,400 ... are pausing to reflect significance of Saudi's providing additional crude and today's drawdown figures as the economy is improving," said George Gero, senior vice president at RBC Capital Markets. The Labor Department said that people filing for jobless claims fell last week to below the critical 400,000 mark.

Jeb Handwerger, editor of GoldStockTrades.com, doesn't think that any technical selling will deter gold's safe haven bid. Handwerger sees $1,600 gold and $40 silver as unrest and violence in the Middle East continues to unfold.

Gold prices were taking a hit in after-hours trading, down more than $10. The move was possibly a mix of profit taking, sinking oil prices and comments from Fed president, James Bullard, who said that the Fed might have to consider ending or modifying its $600 billion bond buying program in light of strong economic data out of the U.S.

Bullard doesn't have any voting rights currently but the threat of higher interest rates that might turn real interest rates positive could be enough to scare away those buying gold as an inflation hedge.

Gold was also moving down with oil as rumors circulated that Libyan ruler, Gadhaffi, had been shot, possibly leaving oil exports to function normally.

Silver prices settled down 13 cents to $33.16 an ounce staying firmly committed to a range between $31 and $34.

Rumors circulated again on Wednesday that investment banks had massive short positions in the silver market and if prices stayed above $31 they would be required to buy back their positions causing a parabolic spike in prices.

This news is nothing new. Phil Streible, senior market strategist at Lind-Waldock, said he has been hearing these cries for more than a decade. In the Commodity Futures Trading Commission's bank participation report for the futures market, there were 19,706 short contracts at the beginning of February, about 15% of open interest. A year ago, short positions were more than 37,000, which shows that the shorts are being unwound gradually and are gradually pushing the silver price higher.



The CFTC is currently debating position limits to the tune of 1,500 per holder. This requirement could take years to go into effect, and Streible believes that once that happens banks will have already repositioned themselves to account for the slow unwinding.

Mihir Dange of Arbitrage says that if silver makes new 30-year highs again that might scare the bears into short-covering, but he thinks "the interim the range of $31.27 to $34.33 will stay in place."



Lind-Waldock's Streible also believes that silver could see a 10% correction in the near term. Despite safe-haven buyers, "I think silver will end up getting hit on the industrial side," he says.

Industrial demand accounts for 60% of silver's usage, and construction and auto demand are slowing to a crawl in the Middle East and North Africa. As oil prices in the U.S. surge past $100 a barrel and in Europe to $120, and consumers see a meteoric rise at the pump, global auto demand also will be hurt.

Stock quotes in this article: AUY 

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.
DOW 16,431.98 +7.13 0.04%
S&P 500 1,863.41 +1.10 0.06%
NASDAQ 4,095.1280 +8.9030 0.22%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

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