Daily Market Update 4/26/11

GOLD
Gold closed down $8.41 today at $1501.70 an ounce on the first full day of global trading since last Thursday. Gold has built an excellent base above $1,500 per ounce. It may not have the volatility and excitement of Silver, but Gold is proving that slow and sure is an excellent investment strategy. Gold’s uptrend is still intact; remember the correlation of inflation and weaker currencies, to political turmoil. Investors now await the outcome of Tuesday and Wednesday’s meetings of the Federal Open Market Committee, which will be followed by the first-ever press conference by Fed Chairman Ben Bernanke, who will likely comment on the future of quantitative easing.

China’s central bank disclosed that they are considering the establishment of a new fund to conduct investment with the country’s swelling foreign exchange reserves. The new funds may target investment in specific areas including energy and precious metals, in an aim to diversify China’s foreign exchange reserve investments, which currently consist mainly of U.S. Treasury bonds. As of the end of February, China holds US$ 1.2 trillion worth U.S. Treasury bonds, the largest in the world.

SILVER
Silver closed today at $45.24, down $2.48 for the day on heavy global volume trading.

Silver finally got the correction market traders have been looking for since $40 an ounce. Sunday night’s high for Silver was $49.82 and last night I saw $44.62 traded, finally a 10% correction from high to low. What caused the correction? Well, nothing goes directly to the moon; some normal profit taking would be healthy for this long term bull market. Yes, the Dollar finally had a little rally and Crude Oil sold off a bit, but use this opportunity to add to your silver holdings as it is still going higher. Look at Gold over the past ten years and it still continues to set new highs every year.

Today’s Other Important News:

US Commerce Department reports that single-family home sales in March rose 11.1% to a 300,000-unit annual rate. That beat forecasts of a 280,000-unit pace.

QUOTE OF THE DAY

"Silver is flying a little too close to the sun as $50 feels pretty radioactive. The fact that we got so close [to that level] might have spooked some investors and could be the trigger for a 10 to 15 percent near-term pull-back," said the trader, who noted that the gold-silver ratio has fallen to a 28-year low of nearly 30:1

Anthony Neglia, president of Tower Trading, said silver would hit $50 before $40 and the metal came close at $49.82 on the Comex.

For many of my clients and friends who are Gold & Silver addicts, I am now posting on Twitter multiple times during the day and night.