Closing Gold & Silver Report 4/11/2012

Brandi Brundidge

4/11/2012 4:09:00 PM

U.S. BUDGET DEFICIT WIDENS; N. KOREA PRESSES TOWARD ROCKET LAUNCH  

Gold prices are still trading below opening levels and may snap a four-session streak of price gains. Investment in Gold has dropped off since late-February highs as investors appear to be looking for more definitive reasons to keep buying. “The broader macro environment still remains positive. In the near term, the floor will be set by a combination of how strong investment demand is, and how responsive the physical market is,” said Suki Cooper at Barclays Capital.

The U.S. government’s budget deficit widened by 5.3 percent in March, with the shortfall expanding to $198.2 billion. While a gap of $196 billion had been projected, the increase was due to increases in subsidies to TARP and recurring benefit payments. “The government budget deficit is still bursting at the seams, with little chance that either side of the aisle is willing to shake hands and get a deal done,” said Chris Rupkey of Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, before the report was released. “The economy is growing again, but we can’t grow our way out of these trillion-dollar deficits,” he said. During last year’s debt-ceiling debate, precious metals prices set record highs.

Despite international protests, North Korea continues toward its planned long-range rocket launch. The rocket, which began fueling Wednesday, could lift off as early as Thursday and complete a three-stage flight over the water near the Philippines. U.S. Secretary of State Hillary Clinton warned that history alludes to “additional provocations” from North Korea likely to follow after the launch, an apparent reference to the possibility of a nuclear test.

At 4 p.m. (CDT), the APMEX precious metals spot prices were:

• Gold - $1,660.50 – Down $0.70.
• Silver - $31.63 – Down $0.11.
• Platinum - $1,585.00 – Down $7.70.
• Palladium - $639.90 – Up $2.00.

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