Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures rose Tuesday, as gloomy economic news added to inflation fears and pushed the metal back above $1,700 an ounce. Gold for December delivery added $23.80, or 1.4%, to settle at $1,702.40 an ounce on the Comex division of the New York Mercantile Exchange. It touched a high of $1,706.40. �Bargain-hunting buying has come back into the market, providing a nice rebound that bodes well for gold�s near- and longer-term prospects,� said Brien Lundin, editor of Gold Newsletter. The latest developments in Europe�s sovereign-debt crisis as well as the congressional supercommittee�s failure to come to grips with the U.S. deficit will �add headline risk and volatility,� he said in comments via email. �But the only viable option left in either case is greater money creation, and this is the fundamental trend that will continue to drive metals prices higher.�

Gold prices briefly pared gains immediately following the release of minutes of the Federal Open Market Committee�s last monetary policy meeting. There isn�t enough support as yet for the Federal Reserve to adopt a formal inflation target even as the central bank is moving toward providing more guidance on where its interest rates will be in the future, according to the minutes. Gold, which is seen as a hedge against inflation, was trading near the session�s high just prior to the release of the Fed meeting minutes. Against that backdrop, the broader metals complex tracked gold higher, paced by silver. Silver for December delivery added $1.84, or 5.9%, to end at $32.95 an ounce. See full story.