Daily Market Update 2/28/11

GOLD
Gold closed at $1,409.20, up $1.20 for the day.  Nice active trading in a narrow band, the range was about $10 from the high to low of the day.  I’m looking for Gold to trade in the $1400 to $1425 range for a short time longer then breaking out and continuing to set new highs until it reaches the next resistance area at $1,500.  I do believe we will see $1,600 an ounce for Gold before summer ends.  In addition to the crisis in Libya dominating the news, we now will have the Politicians in the House and Senate posturing over reaching an agreement to extend the $14.3 trillion U.S. debt ceiling.  This political bravado is in the face of a U.S. Dollar trading at the lowest level since November against the currencies of six trading partners.

SILVER
Silver closed at $33.65, up 55 cents for the day.  Its all inflation news...  the United Nations stated that in January the food price index moved to a record high, and one in six people in the world is living in chronic hunger. The United Nations reports that in the past year: Wheat was up 62%, Sugar was up 46%, Coffee was up 100%, Dairy Products were up 38%, Corn was up 80%, and Cotton was up 130%. Plus, India reported today that they had 11.5% food inflation in 2010.

Today’s other Important News

• The China’s Yuan traded near a 17-year high after Chinese Premier Wen Jiabao said a stronger currency will benefit the nation’s economy.
• U.S. home prices fell 4 percent in the fourth quarter from a year earlier as record foreclosures sapped the confidence of homebuyers, according to the Federal Housing Finance Agency. Sales of foreclosed homes accounted for 37 percent of transactions last month, up from 36 percent in December, the National Association of Realtors said in a report yesterday.