GOLD PRICE NEWS – After breaking down thorough the $1,500 per ounce level overnight, the gold price rebounded back near $1,505 Tuesday morning. The price of gold came under pressure on profit-taking over concerns that it was due for a pause after eight consecutive positive closes. In tandem with softer gold prices, silver prices fell steeply this morning, sliding 1.8% after margin requirements were raised by the CME after yesterday’s session. Precious metals moved lower despite weakness in the U.S. dollar, which has been under relentless selling pressure heading into today’s two-day Federal Open Market Committee meeting. On Monday, the gold price rose as much as $15.40 to a new record high of $1,518.30 before paring its gains and settling at $1,509 per ounce. In doing so, the price of gold posted its sixth consecutive day of new all-time highs. The SPDR Gold Trust (GLD), a proxy for the gold price and the world’s largest gold ETF, finished higher by $0.13 at $146.87 per share. The GLD traded lower by $0.26 at $146.61 heading into Tuesday’s opening bell on Wall Street. Silver continued its ascent alongside the gold price, rising to a new 31-year high of $49.82 per ounce. However, the price of silver quickly tumbled to $45.80 Monday morning before rebounding to close at $46.91 per ounce. The price of silver extended its year-to-date gains to 51.5% – far above the 6.0% gain for the gold price. Moreover, the gold/silver ratio touched 30.43 yesterday morning, its lowest level since 1983. While the gold price continued its record-setting run, gold equities did not participate. The AMEX Gold Bugs Index (HUI), a basket of the world’s largest gold companies, finished lower by 2.6% at 580.52. Although the HUI was weighed down by a 6.8% plunge in Barrick Gold (ABX), its largest component, several other gold producers posted notable losses. Agnico-Eagle Mines (AEM), Kinross Gold (KGC), and Newmont Mining (NEM) declined 3.0%, 0.8%, and 2.4%, respectively. Gold mining stocks were under pressure once again Tuesday morning on the back of weakness in the gold price. Barrick Gold fell 6.8% yesterday after the Canadian-based gold producer announced a C$7.3 billion bid for Equinox Minerals (EGN.TSX). Barrick’s C$8.15 per share all-cash offer requires no additional financing and is 16% above China’s Minmetals Resources previously-announced C$7.00 per share bid for Equinox. The transaction is the latest in a series of multi-billion transactions in the metals and mining sector. With a dearth of new discoveries, the large producers have moved aggressively to maintain as well as increase their leverage to the price of gold and other precious and industrial metals. With gold prices soaring to record highs, the question of how much higher the yellow metal can go is on the minds of investors and traders alike. One precious metals executive who sees a much higher gold price in the future is Rob McEwen, the founder of Goldcorp (GG) and current Chairman and CEO of US Gold (UXG) and Minera Andes (MAI.TSX). In an interview with CNBC, Mr. McEwen contended that the “fundamentals still support a rising gold price,” and predicted that the price of gold could reach as high as $5,000 per ounce in the next 3-4 years. “Gold is the ultimate currency,” McEwen continued, and paper currencies will continue to depreciate against the one form of money that cannot be debased by central bankers. In addition to the highly-anticipated Federal Reserve announcement and Chairman Bernanke’s first ever post-FOMC press conference on Wednesday, several other potential catalysts for the gold price are on this week’s U.S. economic calendar. Consumer Confidence for April will be released at 9am EST this morning, followed by first quarter GDP, weekly jobless claims, and Pending Home Sales on Thursday. The week wraps up with Personal Income, the Chicago Purchasing Managers’ Index, and the University of Michigan Consumer Sentiment Index on Friday.

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