Daily Market Update 3/8/11

GOLD
Gold closed today at $1,430, down $6 for the day. It’s about time we got a little consolidation and profit taking. It wasn’t a sizeable price correction but a short pause in the Silver & Gold upward breakout was badly needed. The markets are the most volatile I have seen in years. Large quantities of Gold, Silver and Crude Oil contracts are being traded in global markets, with wild price swings, based on rumors and unreliable news coming out of Libya and the Middle East.

Example:
Yesterday at about 10 a.m. in New York, the BBC, citing the al-Sharq al-Awsat newspaper, posted a story on its website claiming that Gaddafi was looking to arrange a safe exit from the country. Within a matter of minutes, Light sweet crude (WTI) oil futures on the NyMex dropped more than 2 percent from $106.95 per barrel to $104.25, and gold sold off $9. Foreign Exchange and Global equity markets are all susceptible to the same volatility.

SILVER
Silver closed at $35.85, down $.25 in active trading on excellent volume. One of the many major factors for a continued rally in the Silver price is inflation rates, already of critical concern in many developing countries.  Many Silver investors are worried that the combination of low interest rates in the U.S. and the Fed’s quantitative easing plan will cause real inflation rates to go into double digits later this year, and spike next year.

Today’s other Important News
China’s first gold mutual fund, Lion Fund Management Co., said it has won approval from the State Administration of Foreign Exchange to raise $500 million more to invest in gold-backed exchange traded funds abroad. The Fund said it got the permission to invest overseas under China’s Qualified Domestic Institutional Investor scheme, reports China Knowledge.