Daily Market Update 4/11/11

GOLD
Gold closed today at $1,466.60, down $8.70 an ounce. Many of the market analysts attribute Friday’s Gold rally to the possibility of a U.S. Government shut down, with the problem hopefully averted, today’s correction was to be expected.  

Last Friday, possible shut down of our government could have been a national embarrassment.  The real travesty is the loss of good faith and confidence in the U.S. and our currency.  Faith and confidence is the only thing that backs the trillions of Dollars’ worth of our debt we sell to foreign governments. 

SILVER
Silver closed down $0.72 today, closing at $39.92 on a heavy volume of trading. Silver traded as high as $41.35 before the correcting. 

Profit taking is to be expected considering the major rally Silver has had in the past few weeks.

Much of the demand for Silver is coming from investors with deep concerns about global inflation. The media is focusing on record high prices for Gold, Silver, and Crude Oil, but they are missing the entire story.  We are also seeing record high (inflation causing) prices for Raw materials, Agricultural Products, and industrial metals.  Soybeans, cotton, grains and aluminum are up dramatically.  Corn reached a 33-month high in Chicago trading on Friday. The real concern is global commodity and food inflation. World Central banks are finding it hard to raise interest rates to fight inflationary pressures in the face of losing badly needed economic growth. 

Today’s Important News

• Analysts expect companies to report slower growth in profits for the first quarter, as rising commodity prices dent profit margins and risk hitting consumer spending.  Earnings per share for companies in the S&P 500 index grew 41% in 2010 following a sharp slowdown in 2009, according to Thomson Reuters, but are forecast to grow just 13.6% in the first quarter compared with the same period a year ago.
• Consumer prices jumped 4.9% in February from a year earlier, topping the government’s full-year target of 4%. Inflation probably accelerated to 5.2% in March, which would be the highest level since July 2008, according to the median estimate in a Bloomberg News survey of 23 economists.