Bullion Desk - Home of Free Gold News and Bullion News
05 April 2011

Gold and Silver Soar to Record Highs as US Service Sector Growth Disappoints

Precious metals shrug off China inflation fighting measures, as ISM service sector reading fell further than expected.

Gold and Silver both traded down in morning trade in London, but reversed early losses to show strong rises to a new all time record for Gold and new 31 year high for Silver.

Precious metal prices were boosted by ISM service sector reading, in the US falling further than expected, suggesting that economic recovery and an end to QE were not yet a done deal.

In Europe a further downgrade of Portugal sovereign debt, by Moodys, was supportive of Bullion, with mild selling of the US dollar also adding to the attractiveness of precious metals.

Precious metals continue to rise as the market currently worries over European sovereign debt, civil unrest in MENA countries, and inflation. And while all these factors have driven Bullion to record levels, the focus is yet to shift with any intensity to the Elephant in the room in the shape of massive US debt. If the powers that be decide the only way to deal with this is to inflate it away, as far as Gold and Silver are concerned, $1,450 and $39 per ounce will look cheap.

At Silver continues to generate the lions share of interest at time of writing attracting 80% of all price comparisons. Premiums on 1 ounce Silver Eagles at auctions closing soon in the US were priced at 13.2% over the Silver fix.

Continued tightness of supply in particular in the UK market meant 1 ounce Silver Eagles at auctions closing soon in the UK were priced at over 33% over the Silver fix, highlighting a significant variance in premiums between the two markets.

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