Fundamental Precious Metals (2011-04-25)

<h3>Gold & Silver Stretch to New Records</h3>
By @ibtimes on

Gold & Silver Stretch to New Records

The gains are still spreading across the market even after a long Easter weekend and the absence of many markets today as well. The precious metals gold and silver rallied again to new historic highs with the start of the week as the fear of rising inflation and prevailing uncertainty provided the needed mix for the metals to continue the move higher.

The metals moved higher alongside oil that extended the gains for the fourth day and the dollar that continued to move south, while the active Asian markets fell of fears over accelerating inflation and further monetary tightening.

Gold rallied to a new record this morning at $1517.75 an ounce and currently hovering around $1516.49 higher by 0.86% an ounce extending the record breaking gains for the seventh consecutive session. Silver also rallied nearly 5.4% to set a new all-time high at $49.77 an ounce and currently trading around $49.13 an ounce.

The metals were bolstered by the weak dollar that continues to trade with heavy weakness against its major trading partners. The Dollar Index that gauges the dollar strength against its six major trading partner rose slightly from its weakest in three years and now trading marginally flat around 74.04 recording the high of 74.26 and the low of 73.91.

Investors are focused on signs of growth and inflation amid high uncertainty from political unrest in the Middle East and the debt crisis crippling growth. The Middle East unrest is keeping oil biased to the upside despite the drop in equities seen this morning in Asia, especially China, on prospects that high inflation will increase policy tightening and curb growth and accordingly demand on crude.

Crude oil futures for June settlement continued higher on the unrest in Syria and the continued disruption in oil supply from Libya as fighting intensifies. Crude oil hovers around $112.70 per barrel recording the high of $113.05 and the low of 111.94 per ounce.

Trading remains high volatile today with the focus on the coming days with major data on queue from the US GDP to the FOMC rate decision, as investors see the possibility for the Feds to signals protracted loose monetary policy, keeping the dollar weak and fueling metal gains.

Australia, New Zealand and Hong Kong markets were still closed today and will be returning tomorrow and in Europe the volume is dropping still with all major European markets away on Easter Monday with the LME still closed and no fixings again today. On Friday markets were closed on Good Friday and the US will return later today in the market yet the European session is expected to be very calm with the absence of investors and the US session will be volatile yet volumes still expected low.

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