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, Silver Prices End Quarter With a Pop

NEW YORK ( TheStreet ) -- Gold prices settled at a record high Thursday as the first quarter wrapped up and investors bought gold as protection as the U.S dollar weakened.

Gold for June delivery jumped $15 to $1,439.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,441 and as low as $1,421.70 while the spot gold price was up more than $13, according to Kitco's gold index. Gold rose 1.3% for the quarter more than the 0.9% average.

Silver prices closed 37 cents higher at $37.88 another 31-year record close. Silver popped 22% in the first quarter.



Gold and silver received some help from a weaker U.S. dollar. The U.S. dollar index was lower by 0.34% to $75.86. The dollar was under pressure from a stronger euro as Ireland's central bank said its largest banks would need to raise € 24 billion, less than a Bloomberg analyst poll showed. Ireland is also struggling with high loan rates from its € 67.5 billion bailout from the EU/IMF stability fund as the country refuses to raise its corporate tax rate.

Portugal was also still in the spotlight after its 2010 budget deficit accounted for 8.6% of its GDP. The expectation was for 7.3% and its goal for 2011 is to reduce its deficit to 4.6% of GDP, which will be harder now following the resignation of the Prime Minister and uncertainty in the government. Portugal's long term borrowing rate rose to 8.244% on Wednesday.



Despite all the problems, the euro is finding support on the expectation that the European Central Bank will raise interest rates when it meets next Thursday after Eurozone inflation picked up to 2.6% in March, hotter than expected. In theory, a rate hike could hurt gold prices if the negative real interest rate environment is reversed.

That scenario, however, seems unlikely. The deposit rate at the ECB is 0.25% and with inflation at 2.6%, real interest rates are negative 2.35% -- meaning it would take several severe rate hikes to change the rate environment for gold.

If the ECB does raise rates, the expectation is that it will be gradual in order to not stunt growth. If there is a hike, gold prices could take a hit "we may see some profit taking in gold," says Will Rhind, head of US operations for ETF Securities. "However, I think that will be offset by safe haven buying and this fear of inflation."
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
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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AUY $1.96 0.00%
EGO $3.44 0.00%
GOLD $60.37 0.00%
HMY $1.00 0.00%
THM $0.24 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs