Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.3% to close just above $1,273 as optimism grew that the Senate was nearing an agreement to reopen government, raise the debt ceiling, and prevent a potentially catastrophic U.S. default. However, after negotiations broke down late the day, gold quickly rallied back into positive territory, reaching as high as $1,282 for a 0.5% gain in electronic trade.

Congress has until tomorrow to extend the $16.7 trillion borrowing limit or the U.S. will risk an unprecedented default on its debt obligations, undermining the value of the dollar and jeopardizing the global economy. World Bank and IMF leaders meeting in Washington yesterday warned of "disastrous consequences" in the event of a default that once seemed farfetched but grows more likely each day.

With House Republicans in disarray and the Senate at an impasse, anxious traders shed risk assets late in the session, driving the Dow more than 130 points lower as selling accelerated. The other precious meals also closed lower, with silver dropping 0.8%, platinum dipping less than 0.1%, and palladium falling 1.3%. While all four metals enjoyed a bounce in electronic trade as default worries returned, only platinum joined gold in achieving gains on the day, climbing near $1,386.

At the Comex close: December gold slipped $3.40 to settle at $1,273.20; December silver fell16 cents to $21.19; January platinum dipped10 cents to $1,383.40; December palladium dropped $8.95 to $706.30 an ounce.