Gold and silver prices recovered today and bounced back above $1460 an ounce. Investors took advantage of the recent sell off during the last two sessions which helped add to the momentum. Today gold climbed as high as $1,463.70.
Earlier this week gold prices had fallen 1.3% due to a commodities sell off. Will Rhind head of U.S. operations of ETF Securities said, “Whenever we see a little sell-off in the gold market, what’s historically followed is some physical buying, which has propped up the price.”
In preparation for President Obama’s budget speech the U.S. dollar index was slightly lower today. Gold prices will likely follow Friday’s inflation readings out of U.S. and China to find direction.
Peter Schiff of Euro Pacific recently asked “What’s going to stop this gold bull market?” He believes that if the rate of inflation increases quicker than interest rates, “it won’t really matter to gold . . . gold will keep rising.”
Gold investors continue to be concerned with rising government deficits and their inability to tighten monetary policy. Philip Klapwijk of GFMS said this about government monetary policy, “Investors continue to be concerned about the outlook for inflation, with governments in general showing little appetite to tighten monetary policy significantly.”