Closing Gold & Silver Market Report – 1/2/2013

Ted Prince

1/2/2013 3:59:00 PM

FULL FISCAL CLIFF EFFECTS AVOIDED, BOOSTING GOLD AND EQUITIES

Markets rallied today after lawmakers secured a last-minute solution to evade the potentially crippling tax hikes and budget cuts projected to drag the U.S. economy into another recession. Precious Metals prices rose substantially after news of a resolution, causing Gold in particular to reach its highest level in two weeks. However, today’s budget compromise is by no means a complete fix; rather, debt ceiling and spending cut decisions have simply been postponed several weeks. Precious Metals remain a safe-haven investment as Washington prepares to trudge through the details that will allow the U.S. to sidestep the remaining perils of the fiscal cliff.

The Dow Jones Industrial Average jumped more than 308 points today while the S&P 500 realized its largest single-day gain in more than a year. “It’s a relief rally that we didn’t stay over the cliff,” said Peter Tuz, president of Chase Investment Counsel Corp. “There’s some clarity regarding tax rates going forward, which is a good thing,” he said. “We had a strong year in 2012 and people might have taken some money off the table and here it comes back to the market today.” As mentioned, the fight is not over as U.S. lawmakers will reconvene in February to discuss the federal deficit and the nation’s current $16.4 trillion debt limit.

At 5 p.m. (EST), the APMEX Precious Metals spot prices were:

• Gold, $1,687.90, Up $11.60.
• Silver, $31.07, Up $0.83.
• Platinum, $1,568.80, Up $27.40.
• Palladium, $707.90, Up $3.50.

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