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Silver at Highest Level Since 1980; Gold Hits New Record

Release Date: 
Tuesday, April 5, 2011

Silver prices reached their highest level since 1980 while gold prices reached a new all time record. Silver traded at $38.54 per ounce at 7:16 a.m. Pacific Time on the New York Spot Market; gold was at $1,436.00 per ounce at the same time.

The European Central Bank has been expected to boost interest rates this week to fight inflation that is likely to exceed its target through 2011 as the euro zone economy strengthens. The euro was just below a five-month high against the dollar as investors assessed whether it can make fresh gains given that market players have already positioned themselves for a series of interest rate hikes in the euro zone during 2011.

"We do see a lot of demand for silver from China, so we think silver used in solar panels have increased. We think China will have a lot of demand for silver in the medium to long term," said Natalie Robertson, commodities strategist at ANZ in Melbourne. "With China focusing more on renewable energy, especially after the nuclear crisis in Japan, they will probably be developing a lot more solar panels. Fundamentally, the silver picture looks very strong."

Oil prices were near their highest levels since 2008 at $121 a barrel, as unrest in the Middle East and North Africa supported prices and Nigeria saw political uncertainty with election delays.

Commenting on gold, J.P. Morgan China managing director Jin Ulrich said that it is not the end of gold rally. Gold is seen as an alternative to paper currencies and increasing political uncertainties and rising prices would keep gold as a hedge, he said.

(Sources: “Silver Advances to Most Expensive Versus Gold Since 1983 on Inflation Risk,” Bloomberg, April 5, 2011; “PRECIOUS-Silver hits 31-year top, iShares Silver at record,”

Reuters, April 4, 2011; “It is not the end of gold rally: JP Morgan Chief,” CommodityOnline.com, April 5, 2011)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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