Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.7% to close above $1,282 as optimism over a plan to lift the debt ceiling stoked commodity demand. Senate leaders announced an agreement to reopen the government and prevent default by raise the U.S. borrowing limit just hours ahead of deadline. Although the bill still needs to pass the recalcitrant House before the danger of default is past, traders responded to the news with rising risk appetite, bidding up equities and commodities, including precious metals, despite a stronger dollar. The Dow gained more than 1% and the Global Dow added nearly 0.7%. Silver added 0.8% while platinum and palladium climbed 1.1% and 1%, respectively.

At the Comex close: December gold gained $9.10 to $1,282.30; December silver added 17 cents, to $21.37; January platinum climbed $14.80 to $1,398.20; and December palladium rose $7.25 to $713.55 an ounce.

Gold was further supported by soft economic reports that reinforced the idea that the Fed may delay tapering quantitative easing until next year. The Fed Beige Book survey showed growth slowing in four Fed districts and little change in the other eight. Separately, home-builder confidence declined in October to its lowest level in four months because of mortgage rate volatility and the debt-ceiling impasse. QE supports higher gold prices by devaluing the dollar and increasing the risk of long-term inflation.