Gold and Silver Prices Claw Higher
Source: The Street, Alix Steel (4/13/11)
"Prices regained momentum Wednesday on strong physical buying as investors took advantage of recent selloffs."
Gold for June for delivery was adding $5.80 to $1,459.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has climbed to $1,463.70 while the spot gold price was adding $3.70, according to Kitco's gold index.
Silver prices were adding $0.35 to $40.42 an ounce.
Gold prices had fallen 1.3% this week as broad selling struck the commodities sector, but the metal was rebounding Wednesday as investors stepped in to buy gold on a "discount."
"Whenever we see a little selloff in the gold market, what's historically followed is some physical buying which has propped up the price," says Will Rhind, head of U.S. operations for ETF Securities. Rhind still thinks gold prices could hit $1,500 but that investors will have to be patient.
Dange doesn't think that $1,500 is off the table but that gold should have already broken that level on recent catalysts. According to the latest commitment of traders report, speculative longs in gold increased by 17,449, or 7.2%, from the last week in March to the first week in April, while short contracts grew 5,864, or 11%, pointing towards this more cautious trading outlook.
The U.S. dollar index was slightly lower Wednesday ahead of President Obama's budget speech and gold will also look to Friday's inflation readings out of the U.S. and China for direction.
The Federal Reserve is expected to keep rates low but China could take more steps to tighten money supply, making Friday's inflation reading key to policy initiatives.