This Day On The Street
Continue to site
ADVERTISEMENT
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 Gain on Rising Uncertainty

NEW YORK ( TheStreet ) -- Gold prices rode fears over lingering uncertainty in Japan and the conflict in Libya higher Monday as safe haven buyers jumped into the market.

Gold for April delivery added $10.10 to settle at $1,426.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,435.10 and as low as $1,423.50. The spot gold price was rising $8.30, according to Kitco's gold index.

Gold prices rallied Monday but without a lot of oomph. "It becomes harder and harder as we seize higher prices for funds and for speculators alike to actually buy the high prices," says Brian Booth, senior market strategist for Lind-Waldock. Booth is convinced that gold will still head higher especially with bad headlines coming out of Japan and Libya, which will draw traders back into the gold market.

Gold did benefit Monday as investors assessed the current risk levels of the global economy. Investors were purchasing gold as protection against the continued uncertainty in Japan as well as U.N. airstrikes against Libya. The SPDR Gold Shares (GLD) added almost 10 tons of gold on Friday on renewed buying.

Gold and silver "could be poised for further gains as investors seek to diversify towards safe-haven asset types with a mix of fresh buying and short covering potentially leading gold and silver to retest recent highs," says James Moore, research analyst for FastMarkets.

"Gold is still the chosen haven for European and Far and Middle East investors," say George Gero, senior vice president at RBC Capital Markets, "but open interest has not grown either in gold or silver as gold barely is at 500,000 and silver is still under 135,000," which points to a lack of longs in the market.



Tepco has reconnected power to six of its dying reactors, which now have access to cooling measures. Smoke was reported near reactor number three and there are indications of high radiation levels in food and water near the plant.

Any food shortages will most likely force global food prices higher, something already crippling emerging market economies. Food Price Watch said that the World Bank's food price index grew "15% between October 2010 and January 2011 and is only 3% below its 2008 peak."



Any hints of inflation are typically good for gold prices as investors buy the hard asset as paper money becomes worth less. The real inflation worriers would have already bought gold as world governments staved off disaster by pumping money into the system in 2008/2009. But for traders and investors who missed that trade, they might be more apt to jump in.

Xinhua News Agency, China's state run newspaper, said Monday that the worry that inflation would be one of the biggest risks "facing the world economy ... has become a reality."

1 of 2

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
Submit an article to us!
SYM TRADE IT LAST %CHG
AEM $31.73 0.00%
EGO $5.06 0.00%
GLD $113.08 0.00%
GG $18.68 0.00%
KGC $2.44 0.00%

Markets

DOW 18,024.06 +183.54 1.03%
S&P 500 2,108.29 +22.78 1.09%
NASDAQ 5,005.3910 +63.9670 1.29%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs