Mid-Day Gold & Silver Market Report – 3/31/2011

STOCKS SLIP, GOLD SOARS AS QUARTER ENDS

Even though the final day of the first quarter session saw stocks retreat it appears this is the best first quarter in more than 10 years. There was some optimism on the part of investors that the economy was strengthening, leading to the gains. However, the news out of the Labor Department regarding jobs has driven more back to the safe-haven of precious metals. “Everybody’s been hoping and expecting more of an improvement and it’s been very disappointing to be this far along in the economic recovery and not to have made very much progress at all on the employment front, “ said John Carey, portfolio manager at Pioneer Investment Management.

The weaker U.S. dollar is driving the prices of gold and silver up as well. The dollar is under pressure from a stronger Euro. Despite all the issues in Europe (Portugal, Ireland, etc.), it is believed that the European Central Bank (ECB) will raise interest rates next Thursday. If the ECB does raise rates, it will probably be gradual in order to not stop growth. If that happens, “We may see some profit taking in gold. However, I think that will be offset by safe haven buying and this fear of inflation,” says Will Rhind, head of US operations for ETF Securities.

At 12:26 PM (CT), the APMEX precious metals spot prices were:

• Gold - $1,439.40 (up $14.60 on the day)
• Silver - $37.92 (up $0.34)
• Platinum - $1,775.40 (up $2.00)
• Palladium - $765.20 (up $6.10)