Daily Market Update 3/15/11

GOLD
Gold closed today at $1,397.60, down $29.80 for the day. Amidst very heavy volume, today’s trading was VERY active with spot Gold dropping to $1,380 at one point during trading. Gold traders see today’s market correction as just a knee-jerk reaction to the high anxiety presently gripping the world market place, and further selling pressure in the near term will be minimal. The world’s financial analysts are trying to evaluate how the recent Japanese tragedies will impact the world economies. It is understandable that the Japanese central bank, pumping 18 Trillion yen ($220 Billion) into the money markets, is clearly a stimulus program after the devastation the country has suffered. The recent actions of the Japanese central bank could easily cause our Federal Reserve Bank to implement another round of quantitative easing (QE3) into the US economy. This massive monetary and fiscal injection of currency is fundamentally very bullish for Gold & Silver prices.

Remember in Oct. 2008 when the world’s financial markets dropped significantly, precious metals initially were down as investors needed liquidity to cover their equity losses. However, that correction was short lived and Precious Metal values rebounded to set new highs quickly.

SILVER
Silver closed today at $34.30, down $1.60 on the day. Trading was very active and high volume.

The recent Silver price increases were motivated by the fear of increasing global inflation. How, the question traders are asking, in the light of the current Japanese tragedy, is this going to drive the World’s developed nations into a deflationary period?

The fundamental reasons for owning gold and silver have not changed, and the Japanese 18 Trillion Yen monetary and fiscal injection will definitely lead to a faster erosion of global paper currency than had earlier been projected. Today’s Gold & Silver selloff is a great opportunity to add to your precious metal holdings.

Today’s other Important News

Treasury Secretary Tim Geithner said Tuesday that he does not believe that there is a risk Japan will have to resort to selling some of their U.S. Treasury holdings to raise cash in order to respond to the damage caused by an earthquake and tsunami.