Gold prices rallied in trading on Wednesday as investors cheered a last-minute deal reached by lawmakers to avert the fiscal cliff. Silver prices also rallied on Wednesday.
Gold gained after Congress passed a bill to avert the fiscal cliff. However, analysts don’t expect the rally to continue.
Speaking to Reuters, Frank McGhee, Head Precious Metals Trader at Integrated Brokerage Services, said that the reaction is way overdone and he wouldn’t be surprised to see a fairly substantial sell-off that could erase a lot if not all of these gains.
At last check on Wednesday, spot gold was trading 0.8% higher at $1,687.84 an ounce. Spot gold prices rose to a two-week high of $1,694.70 an ounce on Wednesday before paring some of the gains. Gold futures for delivery in February on the Comex division of the New York Mercantile Exchange climbed $13 to $1,688.80 an ounce.
Silver prices also surged on Wednesday, with spot silver gaining 2.4% to $31.01 an ounce.
In late trading on Wednesday, the iShares Silver Trust (ETF) (NYSE: SLV
) was up 1.98% to $29.93, the ProShares Ultra Silver (ETF) (NYSE: AGQ
) was up 3.67% to $45.75, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL
) was down 4.05% to $48.04.
Platinum and palladium also rose sharply on Wednesday. At last check, spot platinum was trading 1.6% higher at $1,559.50 an ounce, while spot palladium was trading 2% higher at $705.97 an ounce.