News & Reports News Year 2011 April , 2011 Gold prices pop; Silver at 31-year high

Gold prices pop; Silver at 31-year high

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Gold prices popped higher Thursday as investors opted for gold over stocks on disappointing jobs data and mixed earnings in the U.S.


Gold for June delivery added $16.80 to settle at $1,472.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,475.20 while the spot gold price was rising more than $14, according to Kitco's gold index.

Silver prices jumped more than $1, currently trading at $41.69 an ounce, and are eyeing the $42 level as its next conquering point.

Gold and silver skyrocketed Thursday as investors bought gold instead of stocks after U.S. initial jobless claims rose by an unexpected 27,000 last week to 412,000 -- past the critical 400,000 mark. The jobs environment had been slowly improving so the number, along with stronger world-wide inflation and anxiety over earnings, led investors back into precious metals.

George Gero, senior vice president at RBC Capital Markets, says that the gold/silver ratio now around 35 and dollar gyrations are keeping metals in rally mode. ""Higher short term rates in ECB and elsewhere have not deterred investors, Goldman Sachs thinking crude may be fully priced now also not deterred investors ... so silver and gold are now possible joint performers with ... support at $1,425 for gold

[and] $40 for silver.""

Gold almost touched its record intra-day high of $1,478 an ounce. When it does, the move will most likely bring even more technical traders back into the market -- the ""hot"" money that is typically responsible for big price swings -- making the next target for gold at $1,500 an ounce.

Silver is traded in a smaller market and subject to even more speculative buying. Since September of 2010 on QE2 rumors, silver has risen 110%, but its recent climb has many experts wondering if the ""poor man's gold"" is overbought.

The ""safe haven bids or monetary related bids that floated to silver heavily during February and March, if that froth comes out you could have a reversion to a better mien,"" says Jon Nadler, senior analyst at Kitco.com. Nadler thinks silver should be between $25-$30
.