Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold climbed 0.7% to close just under $1,318 after Lawrence Summers withdrew from consideration to become Ben Bernanke's successor as chairman of the Federal Reserve. The leading candidate, Summers faced strong resistance from both Republicans and Democrats in the Senate for his abrasive style and controversial history on bank regulation and other matters. He was also seen as more hawkish on monetary policy than other potential appointees.

With Summers out of the picture, Fed Vice Chair Janet Yellen is now most likely to get the nod. A known dove on monetary policy, Yellen is expected to be much slower to unwind quantitative easing, the Fed's program of buying $85 billion per month in long-term debt. Tantamount to printing money QE supports higher gold prices by devaluing the dollar and increasing the risk of long-term inflation. The dollar immediately fell on the Summers announcement and Treasury yields tumbled. Silver jumped 1.3% and palladium added 1% while platinum slipped 0.2%

At the Comex close: December delivery gold climbed $9.20 to $1,317.80; December silver jumped 29 cents to $22.01; October platinum slipped back by $3.30 to $1,441.20; and December palladium added $6.95, to $706.05 an ounce.