While there was some early profit taking this morning, gold and silver price remain at high levels as the U.S. Dollar hits a new low on the FOREX market. This comes as the Federal Reserve begins a two-day meeting with tomorrow′s first ever press conference by chairman, Ben Bernanke. The Fed is expected o keep interest rates at near zero and continue its second round of quantitative easing through June. Bernanke has pumped another $600 Billion dollars into the U.S. economy, mostly by giving banks and investment firms loans to buy U.S. Treasury bonds. This as helped to refinance the National Debt and has had a positive reaction on Wall Street. But on the down side, the Fed′s policies have also helped fuel inflation, raising the price of oil, gasoline and food, impacting consumer spending.

silver price

A recent poll indicates that some 70% of Americans have already begun adjusting to the higher prices at the gas pumps, either by purchasing less gasoline or cutting back on non-essential spending. An estimated $1.2 Trillion dollars is spent annually by consumers on non-essential items. Some analysts predict that if the high cost of gasoline, food and other staples persists, the impact on the economy could lead to pushing unemployment rates above 10% again and bringing about a double-dip recession. Others believe that has already happened.

After nearly reaching its all-time high of $50 per ounce set in 1980, silver price fell from $49.82 back down to $7.149, a one-day gain of $1.09 or 2.4%. After some major profit taking in India this morning, silver is still near the $46 range. Likewise, gold hit a new all-time high $1.512.80, then dropped mid-day down to $1,496.00, but has recovered after profit taking to $1,504.30. Meanwhile, on the FOREX, the U.S. Dollar has sunk to a new low with the Euro reaching a 16-month high. Today begins a two-day meeting of the Federal Reserve Board of Governors, with a first-ever press conference tomorrow with Fed Chairman Ben Bernanke. He is expected to continue the Fed policy of Quantitative Easing, causing inflation and higher gasoline and food prices, as well as keeping interest rates at nearly zero.

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