Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold surged 3.2% to close at $1,323 after Congress passed a last-minute resolution to re-open government and temporarily lift the U.S. debt limit. The agreement ended a damaging impasse that took $24 billion out of the economy, shaved a half-percent of growth from fourth-quarter GDP, and brought the nation to the brink of default. And it all might happen again in a few months because the deal only lifts the debt-ceiling until mid-January, with no long-term budgetary agreement in place.

Contributing to gold's rally, the dollar fell by the most in a month behind expectations that the Fed will now have to postpone the taper of quantitative easing, perhaps until the end the first quarter of next year. The economic fallout from this impasse and the immediate threat of another are likely to make the withdrawal of stimulus too risky for several months to come. QE supports higher prices for precious metals and other commodities because it floods the economy with cheap liquidity, devaluing the dollar and increasing the risk of long-term inflation. Silver jumped 2.7% while platinum and palladium gained 2.6% and 3.4%, respectively.

At the Comex close: December gold surged $40.70 to $1,323; December silver gained 58 cents to $21.95; January platinum rallied $36.70 to $1,434.90; and December palladium jumped $24.25 to $737.80 an ounce.