But the renewed interest in ethanol proved to be short-lived, as oil retreated below $20 a barrel just four months later. As a result, many of those smaller ethanol companies couldn’t survive as profitable alternative energy investments.

Flash forward to today, where we’ve seen crude oil prices double in just the past four months. Worldwide oil demand has soared, particularly from fast-growing countries like China and India, and although the global downturn has seen the pace of demand slow, when the global economy gets back on track, it should prove even more bullish for oil.

But there’s another sector that should rise, too…

Rising Oil Prices Spark Interest In Alternative Energy

With oil prices rising again recently, it’s sparked yet another conversation about the viability of certain alternative energies.

One ETF that tracks the performance of clean energy firms is the PowerShares WilderHill Clean Energy (NYSE: PBW) – a widely traded vehicle that gives you exposure to this still-growing sector in a safer way than investing in individual companies.

While firms like Exxon Mobil (NYSE: XOM) rake in billions of dollars per quarter from oil, PBW invests almost entirely in experimental, technology-focused “green” companies. And while these guys stand to benefit from higher oil prices just like specific oil companies, their success depends more on regulatory changes, subsidies and a global recognition of the need for alternative energy solutions.

The Alternative Energy Market Gets More Attention

When it comes to the alternative energy market, wind power, solar, hydroelectric, geothermal and nuclear power have all received attention over the past couple of years.

But when the oil market first began its march towards record high prices, it was the ethanol industry that took center stage and triggered the wider debate over cleaner energy resources.

However, the ethanol market faces a battle. Despite the government’s intervention and subsidies for the industry, newer technologies are needed in order to make ethanol more viable – and the industry’s companies profitable. A good example is Pacific Ethanol (Nasdaq: PEIX) – a company that Bill Gates invested in heavily a few years ago, paying $12 a share. Today, the stock trades for just $0.40.

Below is a daily chart of PowerShares WilderHill Clean Energy (NYSE: PBW), which is currently at a critical juncture:

Chart: http://www.investmentu.com/images/iu063009chart.gif

Three Scenarios for the Clean Energy Fund

As you can see, when the stock market bottomed out in March and oil prices retested their lows, PBW’s Clean Energy Fund did the same.

Since then, however, PBW has doubled off those lows to the June 10 high of $11.37. This is right around the swing high of $11.40 that it tested back in November, before it pulled back to the trendline drawn off the March lows.

In addition, the 50-day and 200-day moving averages are very close to crossing one another – a development that sometimes indicates a short-term top.

So what we have here is a relatively clear-cut conclusion…

• A close above $11.40 would be bullish and should lead to higher prices.
• However, a close below the trendline, currently around $10, would be bearish over the short-term.
• A close or two below the 50-day and 200-day moving averages, which are currently around $9.50, could lead to a move down to $8 or lower.

Source: Alternative Energy Investments: Three Scenarios For Clean Energy

This from Reuters, London:

Gold fell nearly 2 percent in Europe on Monday as investors took profits after recent gains, amid disappointment the metal had failed to beat resistance near $930 an ounce last week.

Spot gold slipped to $895.65/897.65 an ounce at 1446 GMT, down from $911.70 in New York late on Friday. Earlier it touched a low of $893.15.

U.S. gold futures for April delivery on the COMEX division of the New York Mercantile Exchange fell $16.30 to $897.60 an ounce.

“There has been some profit taking and disappointment we couldn’t break through $930, even with strong demand from ETFs,” said Commerzbank senior trader Michael Kempinski.

Signs of a recovery in equities, and hopes the Obama administration’s stimulus plan will boost U.S. growth, are taking the heat out of safe-haven buying for exchange-traded funds.

“Stocks had a good performance last week and Barclays had some nice figures today,” said Kempinski. “Probably the safe-haven buying argument is gone for the time being.”

Traders are awaiting an announcement on Washington’s massive stimulus plan and bank rescue package. The Senate was due to vote on the package later this session to clear the way for its passage on Tuesday.

SPDR Gold Trust (GLD), the world’s largest bullion-backed exchange traded fund, said its holdings were static on Friday after rising to a record on two successive days last week.

Gold continued to break its correlation with its main external drivers — oil and the dollar-euro exchange rate.

The dollar weakened against the euro, weighed down by uncertainty over the details of U.S. plans for massive fiscal stimulus, and a much-anticipated package to help banks. A weaker dollar usually benefits gold.

Gold also ignored rising oil prices, which are also typically supportive.

OUTPUT ROSE

The world’s third-largest gold miner, AngloGold Ashanti , said its output rose to 1.268 million ounces in the three months to end-December and said its cash costs at $422 an ounce showed a 13 percent improvement on the previous quarter.

The miner said it plans to keep trimming its hedgebook this year, using $900 an ounce as a guide price for the precious metal. The company reported a fourth-quarter headline loss of 5 cents per share, missing market expectations.

Silver slipped to $12.91/12.99 an ounce from $13.06. The white metal has benefited from technical buying as the gold-silver price ratio declines, analysts said.

“(Silver) continues to make back ground against gold as some investors look to cheaper alternatives to the yellow metal,” James Moore, an analyst at TheBullionDesk.com, said.

Platinum eased to $985/990 an ounce from $999.50. Precious metals consultancy Johnson Matthey said it expects platinum demand to fall 5 percent this year, and held its price forecast for the metal at $700-1,400 an ounce.

South African production will be slightly up, it said, due to new mines, despite the announced closures of some other facilities.

The world’s biggest platinum miner Anglo Platinum reported higher earnings but flagged up cost pressures as it cut its final dividend and said it may cut jobs if prices fall further.

The company, a unit of Anglo American , said it produced 2.39 million ounces of refined platinum last year, slightly below targets.

Spot palladium was at $206/210 against $210.

Palladium jumped 11 percent last week on the back of fund interest in the metal, which is seen as good value compared to platinum. The ZKB palladium ETF saw an inflow of more than 1 percent or 6,365 ounces last Thursday

LONDON, Feb 9 (Reuters)

Platinum bottomed near $770 in late Hong Kong trading, but moved gradually higher through most of the rest of the day, ending at $819/oz., down $7. For the week, platinum gained 3%.

Silver also hit its low late in Hong Kong, and it too pushed steadily higher, making it back into positive territory to close at $9.86/oz., up 13 cents. For the week, silver tacked on 5.2%. (Click here for charts)

While silver had a decent day, gold turned in yet another lackluster performance, ending October with a loss of 18%, the largest monthly decline for the metal in 28 years.

Gold was also held back as the dollar strengthened again vs. the euro, which offset any boost that might have been gotten from rising oil prices.

The reason for weakness in gold seems simple to Adrian Day, the president of Adrian Day’s Asset Management: “Global liquidation means more money from foreign assets are going into the dollar,” Day wrote. “The dollar is seen as a safe haven. There’s also liquidation of gold itself, which is easily sold.”

James Turk, the founder of Goldmoney.com, had a different take, though, saying that, “The dollar is in a short squeeze that won’t last much longer … Gold is dropping in dollar terms because of central-bank intervention and the massive deleveraging of dollar debt.”

The general sector weakness is also obviously playing in, with the Reuters/Jefferies CRB Index of 19 raw materials notching its steepest monthly decline since at least 1956.

“There’s significant pressure on all metals and commodities,” said Paul Sutherland, of Financial & Investment Group in Traverse City, Michigan. “Gold is not acting like a currency. It’s acting like a commodity. People are selling gold and gold shares because it’s something you can sell to raise cash.”

Source: Gold has another disappointing day – But silver rises again

Platinum sank to $760, below the price of gold, in the far East, but rallied from there to a mid-morning high above $820, before finally subsiding to end at $790/oz., down $35. Overnight, platinum is sharply higher.

Silver was the day’s big winner, taking off at the same time as gold and pushing as high as $10.15 before falling back below $10 around noon and trading sideways from there into a close at $9.89/oz., up 70 cents. Overnight, silver has pushed higher. (Click here for charts)

Gold had a solid day yesterday, with silver soaring while platinum continued to bring up the rear. Something of a tailwind was provided by a dollar that slid against the euro and rising oil prices.

The Fed’s rate cut seemed to have little general effect, perhaps because it is widely expected that the European Central Bank, the Bank of England, and possibly even the Bank of Japan will follow suit with rate cuts of their own in the near future.

The Hightower Report wrote of silver’s breakout day: “The silver market mounted a fairly impressive recovery bounce which some players might have attributed to technical short covering. However, with the stock market at times Wednesday adding to the gains from the prior trading session, it would seem like some of the severe deflationary environment was lifting and that in turn helped a number of physical commodity markets like silver rally. It is also likely that strength in gold and copper gave the silver bulls additional confidence during the trade today. Even a slight correction in the stock market after the FOMC rate cut decision failed to severely dent the strength in silver prices.”

As gold rallies, analysts are wondering whether the tipping point is in sight.

“Some are beginning to extrapolate the medium- to long-term consequences of central-bank monetary creation,” said Jeffrey Nichols, of American Precious Metals Advisors. “The flashing lights that they are seeing ahead are the lights of inflation and currency depreciation,” developments which will inevitably push gold higher.

And James Moore, of TheBullionDesk.com, notes that “with the fact gold is considerably lower than at the start of the year and investors may look to further diversify their asset holdings, may allow gold to begin recouping some of its losses.”

Source: Gold rises, platinum falls to near parity -  Silver has a blast-off day

More from Money Morning:

Like most other markets, Brazil has been battered by the credit crisis – the BOVESPA index is currently down 28% in October alone and no less than 52% from its peak as recently as May. It now appears to represent excellent value, with a historic Price/Earnings (P/E) ratio of only7.0.

But are Brazil’s prospects good enough to justify investing there?

Brazil was included in the “BRIC” (Brazil, Russia, India and China) group of rapidly emerging markets that Goldman Sachs Group Inc. (NYSE:GS) created in 2003. At that time the country didn’t deserve the distinction. Long-term growth since the 1970s had averaged less than 2% per capita, and the country had barely avoided bankruptcy in 2002. Every time the world had experienced a credit crunch, Brazil had been caught up in it, chiefly because of the country’s enormous international debt load.

Brazil got lucky. First, socialist President Luis Inacio “Lula” da Silva proved to be surprisingly moderate, not much to the left, economically, of previous Brazilian governments, perfectly willing to welcome foreign investment and generally friendly to the United States. Also, in 2003, energy and commodity prices began their long climb as part of a worldwide commodities rally that saw prices peak at astronomical levels earlier this year.

Since Brazil was not an oil exporter, there was no one single source of new wealth that the government could seize. Instead, revenue flowed to mining companies, the oil company Petroleo Brasileiro SA, better-known as Petrobras (ADR: PBR), and numerous agri-business operations that benefited from the rise in agricultural prices. It didn’t hurt at all when in November 2007 Petrobras discovered about 36 billion barrels of oil in an offshore Brazilian field.

Even Brazil’s ethanol program, which had been a hopeless boondoggle for a generation since it started during the oil crisis of 1979-82, suddenly became the envy of the world, as rising oil prices made Brazilian sugarcane the world’s cheapest and most economically and ecologically efficient source of newly fashionable ethanol. With oil prices down in the $20-a-barrel range, the ethanol-from-sugar program was a typical example of misguided Third World government planning. But at $140 a barrel, it was a bonanza.

Even at $60 a barrel, it is still a useful diversification from petroleum.

Brazil’s debt position improved after 2002 in three ways:

• The outstanding amount of debt has been reduced through modest repayments.
• Its ratio to gross domestic product (GDP) has dropped sharply, as GDP in dollar terms has shot up with the revaluation of the Brazilian real against the dollar.
• And its interest costs have dropped with Brazil’s improving creditworthiness and the generally low level of global interest rates.

Brazil’s ascension to “investment grade” status in spring 2008 appeared to cement the improvement in place; its public sector debt to GDP ratio in June 2008 was around 40%, lower than Britain’s, for example.

The financial crisis and economic downturn of 2008 has made life more difficult for Brazil. Oil and other commodity prices have sharply declined, reducing the value of Brazil’s exports. The real has declined over 30% against the dollar, increasing Brazil’s foreign debt, which is mostly dollar-denominated.

The Brazilian stock market’s decline will undoubtedly have a substantial negative wealth effect, making it more difficult for Brazilian entrepreneurs to finance new projects. On the other hand, a forecast by The Economist has Brazil still growing at 4.6% in 2008 and 3.4% in 2009, with consumer prices rising 6.0%. The Central Bank of Brazil has a good grip on inflation, with its Selic short-term rate at no less than 13.75%, while it is injecting funds into the banking system to battle the global liquidity shortage.

With continued economic growth, modest inflation, and stock prices at bargain levels for U.S. investors, Brazil is well worth considering. There are more than 30 Brazilian companies with full American Depository Receipt (ADR) listings on the New York Stock Exchange, plus 40 to 50 more traded on the over-the-counter market.  A few attractive examples you might want to look include:

Banco Itau Holding Financeira SA (ADR:ITU). This stock features a Price/Earnings There are three large banks listed on the New York Stock Exchange: The other two are the other two are Banco Bradesco SA (ADR: BBD) and Uniao Bancos Brasile SA (Unibanco) (ADR: UBB). However, Itau is the cheapest of the three, though only slightly.

Companhia Vale do Rio Doce, now referred to only as Vale (ADR: RIO). This is one of the true global blue chips. It has a market capitalization of almost $56 billion, and its stock has fallen by fully 75% since May. It is an iron-ore company with ancillary operations in gold, nickel, copper and other metals, and its shares are trading about four times projected 2008 earnings. The stock features a 5.0% yield. As one of the world’s low cost producers of iron ore, it should bounce back once conditions become more clear.

Petroleo Brasileiro SA, better known as Petrobras (ADR: PBR). Petrobras is one of the few emerging market oil companies with access to modern technology and willingness to work with the oil majors. Down by 60% in the last five months, the stock’s prospective P/E ratio is now only 5.5. It has a dividend yield of 1.3%. Petrobras remains a fairly low cost oil producer, since its production comes from conventional, albeit offshore sources.

Companhia de Saneamento Basico, also known as Sabesp (ADR: SBS). This is the water-and-sewage system for Sao Paulo. Now that’s a growth business, and is one that’s not dependent on commodity prices or on rapid Brazilian economic growth. The shares feature a P/E ratio of only 3.1 and a yield of 8.0%. This one must surely be a bargain; it has very little dependency on the economy.

Votorantim Celulose e Papel SA (ADR: VCP). This is a pulp-and-paper company, with a prospective P/E ratio of 6.0 and a dividend yield of 9.5%. Trees grow fast in the tropics; VCP benefits from that!

Finally, you should consider the Brazilian ETF, the iShares MSCI Brazil Fund (NYSE: EWZ). The fund was more than $5 billion in size at Sept. 30, and currently trades at a P/E of about 7.0 with a dividend yield of 3.0%.

As I said, Brazilian stocks are currently in the bargain-basement category, and well worth a look.

PS. Andrew Gordon at Investor’s Daily Edge recently said that Brazil was well placed to weather the current financial crisis. Read why Brazil is the best of the BRICs here.

Source: Six Profit Plays From South of the Equator

The bank has a market share of 8 percent in terms of assets. It has 1,026 branches across the country and more than 4 million customers.

Pakistani stocks have fallen to their lowest level in almost 14 months on rumors involving political instability surrounding President Pervez Musharraf potential resignation. It also didn’t help that militant Islamists blew up the Danish embassy. Six Pakistani civilians were sacrificed to avenge the perceived blasphemy committed by Danish cartoonists two years ago.

The Karachi Stock Exchange’s 100-share index has dropped to lows not seen since early April, 2007, losing about 25 percent or nearly 3,000 points from a record high in April. The Pakistani rupee has lost more than 10% of its value during the last two weeks, while the Pakistani trade deficit has exceeded $10 billion, due to rising oil prices.

Bank stocks in particular have plummeted. Pakistan’s United Bank Ltd. has fallen more than 50% since mid-March, MCB Bank dropped almost by the same margin since February.

Which is surprising. MCB is Pakistan’s most profitable bank, with return on average equity of 38 percent and loan profitability of 8 percent. The bank has a market share of 8 percent in terms of assets. It has 1,026 branches across the country and more than 4 million customers.

In fact, MCB is so attractive that Malaysia’s biggest bank, Malayan Banking Bhd, agreed to pay over $920 million for a 20 percent stake, at an 11 percent premium to MCB’s May 2 closing price. Malayan is paying 5.1 times book value, twice the average 2.2 times book value for Pakistan banks.

Yes, MCB Bank was one of the stocks that did bounce back with the overall Karachi stock exchange.

We profitably applied a crisis investing strategy using Pakistani ADRs in the aftermath of the assassination of Benazir Bhutto. We think this is a good time to reprise it.

Buy MCB Bank (MCBBI) at current levels around $8, with an upside of 20% by September.

The ADR represents two original shares. The pricing typically moves with a 24-hour delay to the Karachi stock. For some reason, you cannot track the ADR on Google Finance… just the Pakistani stock. To track the ADR, refer to Bigcharts.om.

Source: Use MCB Bank ADRs to Leverage Political Crisis in Pakistan

Since the beginning of this year, the price for this fuel source has increased by almost 50% — though compared to crude oil, it’s positively cost-efficient and currently accounts for around 40% of the electricity generated in the U.S.

In December of 2005, natural gas reached its peak price of $15 per million BTUs (British Thermal Units). This was due to many factors including unusually high temperatures over that summer and the devastating hurricanes that marked that year.

New record highs for natural gas prices?

Prices are currently around $12 per million BTUs. But this year, a cold winter has already had an impact – reducing inventories by 16% compared to last year.

Adding to this, less LNG (liquid natural gas) imports are anticipated and NOAA, the National Oceanic and Atmospheric Administration, is predicting two to five major hurricanes with Categories of 3 or above this season.

This could mean major profits for investors and there are plenty of potential winning natural gas stocks out there.

My favorite is a small San-Diego-based supplier that is having a banner year…

My natural gas stock choice is Royale Energy Inc.

Royale Energy Inc. is experiencing 52-week highs daily but it still has a long way to go.

Operating as an independent oil and natural gas producer in the U.S., the company owns, operates and leases oil and gas interests in California, Texas, Utah, Oklahoma and Louisiana. It also engages in the developmental and exploratory drilling.

Don’t wait too long to make your move…

In March, the company announced that its oil and gas reserves were up 28% and rumor has it that they are expecting to confirm a significant reserve discovery in the next few weeks.

Happily, Royale Energy is no fly-by-night operation — it’s been around since 1986.

With a market cap of about $59 million this company has the potential — and the room — to grow.

In 2006, Fortune magazine named it one of America’s 100 top fastest growing small public companies – looks like they were right on target.

The stock price has already seen a 69% increase this year so you don’t want to wait to jump onboard for maximum gains.

If your looking for a winning natural gas stock, I recommend you buy shares of Royale Energy Inc. (ROYL:NASDAQ) at or under $9. I’m looking for (at least) a 20% increase in price by January 2009.

Source: Rising Oil Prices Good for Natural Gas Stocks

Platinum also tried to recover its European losses during the New York day, but fared less well than gold, ending at $2069/oz., down $46. Overnight, platinum is sharply lower.

Silver tracked gold very closely, but staged a more impressive rally in New York that carried it nearly back into the black for a close at $17.41/oz., down a penny. Overnight, silver has fallen further.
(Click here for charts)

A pretty lackluster day for the precious metals, especially considering that rising oil prices were there for support. But traders obviously felt that a modest advance for the dollar was of greater importance.

That the metals also came well off their lows was also encouraging, but the relationship between gold and crude continues to be double-edged as oil acts both to support the gold price and to cap it.

As Kitco’s Jon Nadler wrote: “Gold remains on the defensive for the moment, as it is lacking core fabrication demand and more attention from investors … The latter continue to be attracted to oil like insects on a May evening.”

Nevertheless, that is a reversible phenomenon, according to Mark O’Byrne, of Gold and Silver Investments Ltd.

O’Byrne writes that “gold is likely to outperform oil in the medium to long term … Strong physical demand internationally is likely to cushion the sell-off and result in gold finding strong support again between $850 and $870.”

But Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois, makes the pessimists’ case, saying that “inflationary expectations are too high and the Fed can’t live with this. Interest rates are going to be rising and everyone will get out of commodities.”

Whether gold must fall with rising interest rates remains to be seen, but futures traders are increasingly betting on that rise, with the market showing a 43% chance the Fed will raise borrowing costs to 2.25% by December 16, compared with a 38% chance a week ago.

Source: Gold, Platinum Slide

The Bakken Shale is a rock formation in the Williston Basin, a 202,000-square-mile depression that stretches along the eastern edge of the Rocky Mountains from southern Canada through North Dakota and Montana. Oil-hunting geologists targeted the U.S. portion as far back as the 1950s.

By the 1960s, oil companies had discovered more than 375 million barrels of reserves in North Dakota and eastern Montana. In the early 1980s, Montana’s oil production peaked at 32 million barrels in 1982 and North Dakota at 50 million barrels in 1983.

Then oil plunged from $35 a barrel down to $10. It became too expensive to produce Bakken oil, and the companies shut down operations… until recently.

In 2004, Oil and Gas Investor ran a story called “The Bakken Is Back.” Rising oil prices and tremendous advances in drilling technology suddenly made the Williston Basin a great place to be again.

Wood Mackenzie, the oil and gas industry analysts, estimate Bakken holds 200 billion barrels of oil. That sounds like a lot of oil, doesn’t it? The problem is that it doesn’t tell you one vital piece of information: How much of that oil is recoverable?

In the best oil fields, recoveries are under 30%. However, Bakken isn’t an ideal field. According to a North Dakota Department of Mineral Resources study (which echoes federal findings), Bakken will probably see 1% recovery. So right now, with 200 billion barrels in the ground, we can expect to get 2 billion out.

That’s about six months worth of U.S. imports and not nearly enough to affect the price of oil.

Of course, with oil at $120 per barrel, somebody will figure out how to squeeze more oil out of Bakken. It may cost more, but as long as there is money to be made, somebody will work it out.

Q: I just read Russia is spending $45 billion on finding new oil and gas… How does this compare to other countries? – B.F.

A: Some of the biggest recent news in energy infrastructure has come from Russia’s state-run oil giant, Gazprom.

Gazprom plans to triple its annual exploration and production budget for natural gas to $45 billion by 2010. This is an enormous amount of spending… even more than Brazil’s Petrobras, which plans to spend $118 billion over the next five years (that works out to about $26 billion per year).

And both companies have giant projects to finance. Gazprom needs about $75 billion to develop two giant Arctic fields, including one that holds enough gas to supply the entire world for a year. And Petrobras will spend an estimated $50 billion to $100 billion to develop Tupi – the second-largest discovery in 20 years.

These mind-boggling spending plans are further evidence that the costs of finding and exploiting giant oil and gas fields are soaring. Most of the large fields being discovered are in technically challenging places. It’s not anything like Saudi Arabia’s legacy fields, where you can stick a straw in the ground and up comes crude oil. This spending is incredibly bullish for oil services… and it’s another reason I’m buying Canada.

Gazprom has to drill in the unforgiving Arctic, and Petrobras is trying to tap oil under miles of water. Canada’s oil sands, on the other hand, are right there on the plains of Alberta and Saskatchewan. We already know where it is, how to drill it, and how much it’s going to cost – comparatively little when you look at Tupi and other difficult fields.

And while oil prices are high, oil-sand drillers are making a fortune. Most of Alberta’s main players already have this priced into their stocks. But I’ve found a few fantastic companies next door – in Saskatchewan – that have so far gone undiscovered. Click here to read more details. Good investing,

Matt

Editor’s note: Each Wednesday, Matt Badiali, our frequent contributor and natural resource expert, will answer your most pressing questions regarding commodity investing.

Source: The Commodity Investor Q&A

Gold had a very choppy day that saw it peak short of $880 in the far East, then decline steadily during London and the first hour of the New York session on Wednesday, but then bounce off an $865 low three times by noon, after which the trend was gently upward, to a finish at $867.80, down $7.90.

Overnight, gold has been edging higher in London.

Platinum also skidded into New York’s first hour, but it then fought its way back to neutral, ending at its intraday high of $1961/oz., up $1. Overnight, platinum is sharply higher.

Silver followed gold’s lead almost exactly, falling as low as $16.45 before rallying back to a close at $16.60, down 24 cents. Overnight, silver has been flat.
(Click here for charts)

Although the metals got some support from still-rising oil prices, the dominant factor was the dollar, which strengthened enough to drag gold and silver down after three straight positive sessions.

Also factoring in were reports out of India that gold sales during Akshaya Tritiya, the Hindu religious festival considered an auspicious time to buy gold, have been disappointing.

Julian Phillips, an analyst at GoldForecaster.com, admits that the finance ministers from the G-7 industrialized nations “have made it clear that they do not like a weak dollar and will do something about it, which could be why the dollar is stronger” against the euro.

However, “We believe the gold price will soon reflect a bigger picture than simply the euro/dollar exchange rate,” Phillips said.

And “with supply disruptions continuing to push oil to higher levels, gold looks set to benefit from further inflation-related hedging in the short term, while strong physical demand helps provide a strong base,” wrote James Moore, of TheBullionDesk.com.

That physical demand isn’t likely to abate, as even one member of the Fed talked openly about inflation yesterday.

“The real current threat to the economy is inflation, as food and fuel are taking a big bite out of everyone’s wallet,” said Miguel Perez-Santalla, of Heraeus Precious Metals Management in New York. “With this kind of mixed news [strong dollar vs. rising inflation], the market is sure to be choppy in metals and any big dips may be considered good buying opportunities.”