Money and Metals

Bloomberg has the latest on precious metals. "Gold rose the most since the Sept. 11 terrorist attacks on concern that the dispute over Iran's nuclear program will disrupt oil exports and spur inflation. Silver topped $13 an ounce for the first time since 1983. Gold is the highest in 25 years on concern that gains in energy and metals prices will boost the cost of consumer goods. Oil jumped to a record high today in London."

"'We're in the throes of a protracted bull market,' said Frank McGhee, metals trader in Chicago. 'This is a fund-buying frenzy. It's being fed by investor interest. You're seeing the metals inflating against all paper currencies.'"

"Gold futures for June delivery rose $18.70 to $618.80 an ounce on the Comex division of the New York Mercantile Exchange, after reaching $619.30. the 3.1 percent gain was the biggest since Sept. 14, 2001, the first day of trading after the terrorist attacks."

"Silver rose 51 cents, or 4 percent, to $13.365 an ounce on the Comex, after earlier reaching $13.38, the highest since March 1983. Silver has jumped 89 percent in the past year."

"'It was a perfect storm for gold today,' said David Meger, an analyst in Chicago. 'Lower dollar. Higher oil prices. Base metals rallying. Commodity interest across the board. Funds are not afraid of buying on new highs.'"

"Hedge-fund managers and other large speculators increased their net-long position in Comex gold by 30 percent in the four weeks ended April 11, reports from the U.S. Commodity Futures Trading Commission show."

"Gold sold in yen has gained 19 percent this year while gold sold in euros has climbed 15 percent. Last year, the metal gained 36 percent in both currencies while gold sold in dollars gained 18 percent. 'Gold is a currency,' said George Ireland."

And a Bloomberg columnist thinks inflation is higher than reported. "I'm convinced there's a much more insidious story that needs to be told as the bond and precious-metals markets gyrate daily over perceived inflation threats. If the full impact of consumer-price increases were accounted for, investors would have a lot more to worry about, and you should prepare for a threat that's much greater than Labor Department reports indicate."

"The government has a vested interest in keeping official inflation measures low. Everything from Social Security cost-of living increases to marginal tax rates is adjusted annually to this all-important gauge. 'It's hard to argue that the average person has seen a 3 percent CPI,' analyst Jim Floyd says. 'If you've had surgery, paid for college or bought a house recently, it's hard to buy even a 3.5 percent inflation rate.'"