Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.7% to close above $1,276 as the ongoing budgetary impasse stoked safe-haven demand. President Obama and Congressional leaders have made little headway in talks aimed at reopening government and lifting the debt-ceiling by October 17. Meeting today in Washington, IMF and World Bank economists warned of "disastrous consequences" for the global economy if an agreement is not reached and the U.S. defaults on its financial obligations. Goldman Sachs chief economist Jan Hatzius said today that the shutdown alone will cost the economy half a percentage point, cutting growth from 2.5% to 2% in the fourth quarter.

Under looming threat of default, the dollar fell against major rivals, supporting higher prices for gold and other commodities. A weaker dollar makes many commodities less expensive to holders of other currencies because they are denominated in dollars internationally. The other precious metals followed gold higher, with silver adding 0.5%, platinum 0.6%, and palladium 0.3%.

At the Comex close: December gold gained $8.40 to $1,276.60; December silver added 9.5 cents to $21.35; January platinum picked up $7.90 to $1,383.50; and December palladium rose $1.95 to $715.25 an ounce.