Gold prices rose sharply on Monday as hopes that lawmakers will reach a deal before the year-end deadline on reducing U.S.’s deficit lifted investors’ sentiment. The precious metal also rallied amid reports that Greece will receive more funding. Silver prices also rallied on Monday.
Gold prices gained as congressional leaders and President Obama expressed confidence that a deal on reducing U.S. fiscal deficit will be reached before the deadline. Hopes of a deal also sparked a rally in equity markets on Monday.
Investors’ sentiment had been weighed down in the last two weeks on concerns that lawmakers in Washington DC would fail to reach a deal on deficit-reduction plan before the end of this year resulting in automatic spending cuts and tax increases worth nearly $600 billion taking effect on January 1, 2013, which would push the U.S. economy into a recession. However, congressional leaders and President Obama have shown confidence in reaching a deal and this has boosted sentiments.
Gold prices also gained as the U.S. dollar weakened against the euro. At last check on Monday, spot gold was trading 1.03% higher at $1,731.15 an ounce. Gold futures for delivery in December on the Comex division of the New York Mercantile Exchange settled $20 higher at $1,734.40 an ounce.
Silver prices also surged on Monday. At last check, spot silver was trading 2.73% higher at $33.09 an ounce.
In late trading on Monday, the iShares Silver Trust (ETF) (NYSE: SLV
) was up 2.76% to $32.07, the ProShares Ultra Silver (ETF) (NYSE: AGQ
) was up 5.59% to $53.08, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL
) was down 5.41% to $42.67.
Platinum and palladium also rallied. At last check, spot platinum was trading 1.09% higher at $1,571 an ounce, while spot palladium was trading 1.99% higher at $639.50 an ounce.