Daily Market Update 3/24/11

GOLD
Gold reached an all-time High today of $1,449 in very active trading, closing the day at $1.438.10, up only $.90 for the day as we finally saw some profit taking from the day’s high.

During 2011 Gold has traded from $1,319 an ounce to $1,449 per ounce. Believe it or not, Gold is only up 1% since the start of 2011.  In the past three months Gold has built a super base for the next leg up and I believe Gold will break through some resistance at $1,500 and will be trading at $1,600 this July.

Let’s recap the Top Twelve reasons why you need to own Gold & Silver right now:

1. Domestic quantitative easing is still in force (QE2) with creditable talk about when QE3 could start
2. Extraordinary U.S. Debt, Budget and Trade Deficits continue to drive down the Dollar’s value
3. 28 States have Billion Dollar Budget Deficits – Civil and/or Union protests are expected by Summer
4. U.S. Unemployment rates and Real Estate default/foreclosure numbers continue to increase
5. The Euro struggles as more and more PIIGS countries need to be bailed out by the European Union
6. Japan will soon initiate its own version of quantitative easing, $300 Billion worth to start
7. Millions of Japanese are at risk from Radiation exposure, the cost of lives and Yen is indeterminable
8. Crude oil & gasoline prices went up 15% in one month due to spreading violence & protests in the Middle East
9. Coalition Nations are at war with Libya, costing billions of Dollars and Euro, with no exit strategy.
10. The UN reports Commodity and Food Inflation are at all-time highs. Hyper-Inflation is on the way
11. Brazil, China, India & Russia are adding massive amounts of gold to their reserves, replacing Dollars
12. After 21 years, the World’s leading Central banks stopped selling Gold in 2010, and are now net buyers

To quote Adam Klopfenstein, senior market strategist for Lind-Waldock Commodity Brokers “There’s so much going on in the world that it’s hard to find a reason not to own gold.”

 
SILVER
Silver reached $38.19 during very exciting trading today and closed at $37.52, up another $.31 for the day. Silver has definitely taken the spotlight away from gold, being up over 20% since Jan 1, 2011 and virtually setting new 31 year highs daily.

Was Silver undervalued last year compared to Gold, Platinum and Palladium? YES! Just a little over a year ago, the gold/silver ratio was 65 to 1 (as of Jan 2, 2010). We now have a current gold/silver ratio of 38 to 1. 30 to 1 is the historic average ratio, and a 30 to 1 ratio would bring Silver up to $48 per ounce with gold at the current levels. Silver, a by-product of copper mining, has been given additional support with Copper continuing to increase to a new 2 1/2 week high at $9,784 per ton today.

Today’s Important News
The Japanese government said Wednesday that the economic cost of the March 11 earthquake and tsunami could be as much as $308 billion, more than double the cost of the 1995 Kobe earthquake.

Jerry Xie told Reuters, on the sidelines of the Mines and Money Conference in Hong Kong, that China Gold International (42% owned by State-owned gold mining major China Gold Corp) aimed to acquire gold and copper-gold mines in neighboring countries of China, including Russia and Mongolia.