Mid-Day Gold & Silver Market Report – 5/11/2011
Stephanie Chandler
5/11/2011 12:14:00 PM
METALS RELAX ON HIGHER DOLLAR
Precious metals are pulling back slightly on news of a stronger dollar as well as profit taking after a few strong days. Scott Redler, chief strategic officer at T3Live.com, and other traders initiated some short positions yesterday, looking to bet against higher prices, especially in silver. There is news that China has high inflation numbers but falling industrial output, which would indicate that prices are rising and the economy is slowing. China’s inflation data reflected a slip to 5.3%, however it was still higher than the expected 5.2%. The Bank of England said that inflation could hit 5% in 2011 despite the U.K. claiming that prices fell to 4%. Germany reports that inflation was up to 2.7%, the highest in a few years and the U.S. is at 2.1% for the month of April.
When there is high inflation that spreads quicker than interest rates it is usually a bullish time for gold and silver as a safe haven because it means that your dollar in the bank is worth less than the hard asset in your hand. The editor of GoldStockTrades.com, Jeb Handwerger, says that although he is not buying at the moment he still expects gold to hit $1,600, a prediction he made early in the first quarter.
There are rumors circulating that the EU central banks might be looking to avoid even more debt and interests rates by selling off some of their gold. However, Adrian Ash, head of research at BullionVault.com says, “No matter how much money Athens now needs, Eurozone central banks won’t sell any gold to help…sovereign gold reserves are the ultimate back-stop. Selling even one ounce would put this crisis on a par with WWII.” Chief Investment Officer of Hennion & Walsh, Kevin Mahn, who oversees $2 billion, also agrees. Mahn adds that 5%-7%, or as low as 3%, of a clients portfolio should be allocated to precious metals.
At 12 PM (CT) the APMEX precious metals prices were:
- Gold price – $$1,499.80 (down $18.60)
- Silver price – $35.35 (down $3.19)
- Platinum price – $1,777.80 (down $24.10)
- Palladium price - $716.70 (down $17.90)
APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies
