Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged slightly higher to close near $1,427 as oil rallied after Iran seized a British oil tanker in the Strait of Hormuz, boosting safe-haven demand. Silver surged 1.3% to finish at a 13-month high of $16.41.

Iran's Revolutionary Guard captured a British-flagged tanker late Friday in retaliation for the detention of an Iranian tanker in Gibraltar. The actions come amid rising tensions in the region following the US shooting down an Iranian drone and Iran's enrichment of uranium, perhaps toward developing a nuclear weapon, among other clashes.

West Texas Intermediate crude rallied 1.2% to more than $56 per barrel on worries that the turmoil may diminish the flow of Middle East oil through the Strait of Hormuz, conduit for a fifth of the world's oil consumption. Gold and silver often trade in sympathy with oil as hedges against energy-related inflation.

Silver's rally extends last week's 6.3% rise as investors are waking up to its undervaluation relative to gold. The gold-to-silver ratio hit a 26-year high of more than 90:1 recently, meaning it took 90 ounces of silver to equal the value of one ounce of gold. Over the past 20 years, the average ratio is around 60:1. Both gold and silver trade as safe-haven currencies and industrial commodities, with silver having more industrial uses.

The other precious metals were also higher, with platinum and palladium adding 0.1% and 1.4%, respectively.

At the Comex close: August gold added 20 cents to $1,426.90; September silver jumped 22 cents to $16.41; October platinum picked up 60 cents to $852.70; and September palladium gained $20.90 to $1,529.20 an ounce.