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Morning Note: Gold Replacing Dollar as World’s Reserve Currency?

$105 per barrel oil. Cotton prices at record levels. Food prices at 2008 highs. Typically, such commodity price increases would send central banks running to the U.S. Dollar to secure the value of their savings. After all, the dollar has been the reserve currency since World War I.

But not this time.

Central banks are shedding dollars, reducing their holdings by about $9 billion in previous quarter, according to Nomura Securities’ Jens Nordvig, global head of G10 FX Strategy.

What are they buying instead? Gold.

The yellow metal hit a fresh record high this morning, while the dollar index dropped to a 15-month low. The news had Fast Money’s Brian Kelly looking to add more gold and silver longs to his portfolio Thursday morning.

“What is working is gold, silver and oil,” said Kanundrum Capital’s Kelly. “I wish I had more.”

Gold and silver have become the inflation hedges of choice for some investors. Gold hit an intra day high today of $1,448 per ounce. Silver is trading at 31-year highs, hitting an intra day high of $38 per ounce.


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Trader disclosure: On March 24, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Guy Adami is Long (AGU); Guy Adami is Long (MSFT); Guy Adami is Long (C); Guy Adami is Long (INTC); Guy Adami is Long (NUE); Guy Adami is Long (GS); Guy Adami is Long (BTU); Steve Cortes is Long (TM)p; Steve Cortes is Long (EXC); Steve Cortes is Long (GS); Steve Cortes is Long (SO); Steve Cortes is Short (F); Steve Cortes is Short (BAC); Steve Cortes is Short (DBA); Steve Cortes is Short Natural Gas; Steve Cortes is Short Silver; Steve Cortes is Short Wheat; Steve Cortes is Short Corn; Steve Cortes is Short Beans; Steve Cortes is Short Japanese Yen; Joe Terranova is Long (C); Joe Terranova is Long (VRTS); Joe Terranova is Long (GS); Joe Terranova is Long (JPM); Joe Terranova is Long (UPL); Joe Terranova is Long (MS); Joe Terranova is Long (PBR); Joe Terranova is Long (BAX); Joe Terranova is Long (TEVA); Joe Terranova is Long (IBM); Joe Terranova is Long (BTU); Joe Terranova is Long (POT); Joe Terranova is Long (XOM); Joe Terranova is Long (DIS); Joe Terranova is Long (RSX); Joe Terranova is Long (CNQ); Joe Terranova is Long (CNX) Puts; Tim Seymour is Long (AGU); Tim Seymour is Long (BAC); Tim Seymour's Firm is Long (POT)

For Brian Kelly
Accounts managed by Kanundrum Capital Are Long (TLT)
Accounts managed by Kanundrum Capital Are Long U.S. Bonds
Accounts managed by Kanundrum Capital Are Long (GLD)
Accounts managed by Kanundrum Capital Are Long (SLV)
Accounts managed by Kanundrum Capital Are Long Gold
Accounts managed by Kanundrum Capital Are Long Corn
Accounts managed by Kanundrum Capital Are Long Soybeans
Accounts managed by Kanundrum Capital Are Long Wheat
Accounts managed by Kanundrum Capital Are Long Euro
Accounts managed by Kanundrum Capital Are Long (VLO)
Accounts managed by Kanundrum Capital Are Long (RDC)|
Accounts managed by Kanundrum Capital Are Long (MCP)
Accounts managed by Kanundrum Capital Are Short Yen
Accounts managed by Kanundrum Capital Are Short (XLF)
Accounts managed by Kanundrum Capital Are Short (IXG)

For Dennis Gartman
Funds managed by Dennis Gartman are Long Gold
Funds Managed by Dennis Gartman are long Oil
Funds Managed by Dennis Gartman are long Canadian Dollars
Funds Managed by Dennis Gartman are long Australian Dollars
Funds Managed by Dennis Gartman are long Corn
Funds Managed by Dennis Gartman are long Sugar
Funds Managed by Dennis Gartman are long Natural Gas
Funds managed by Dennis Gartman are Short Euros

For Rich Volpe
**No Disclosures**

For Colin Gillis
**No Disclosures**

For Scott Nations
Scott Nations is long (SPY)

For Heather Jones
BB&T Capital Markets is a Market Maker in (SFD)
BB&T Capital Markets is a Market Maker in (TSN)
BB&T Capital Markets expects to receive or intends to seek compensation for investment banking services from Smithfield Foods, Inc. and Tyson Foods, Inc. in the next three months.
An affiliate of BB&T Capital Markets received compensation from Smithfield Foods, Inc. and Tyson Foods, Inc. for products or services other than investment banking services during the past 12 months. The analyst or employees of BB&T Capital Markets with the ability to influence the substance of this report know or have reason to know the foregoing facts.




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