On Wednesday, gold (NYSEARCA:GLD) futures for December — the most active contract — jumped $34.60 to close at $1,320.70 per ounce, while silver (NYSEARCA:SLV) futures surged 72 cents to finish at $21.90.
Although precious metals fell sharply when the U.S. Government started its partial shutdown, gold and silver both recovered as little progress has been made so far between Republicans and Democrats.
Congress, divided over Obamacare, was unable to pass a continuing resolution earlier in the week that would keep the government funded through the start of the new fiscal year. As a result, any agencies that needed appropriations are now without funding and can not legally operate with the exception of those duties that are considered necessary to protect life and property.
In addition to the budget woes on Capitol Hill, the Treasury Department is quickly approaching the need to raise the debt ceiling. In a recent letter to Congress, Treasury Secretary Jacob Lew explained the department has started using final extraordinary measures. “There are no other legal and prudent options to extend the nation’s borrowing authority,” he said. “The impact of these measures was incorporated into the forecast that I shared with you last week, and Treasury continues to believe that extraordinary measures will be exhausted no later than October 17, 2013.”
By the end of the trading day, shares of the SPDR Gold Trust (NYSEARCA:GLD) increased 2 percent, while the iShares Silver Trust (NYSEARCA:SLV) gained 2.5 percent. Gold miners (NYSEARCA:GDX) Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) increased 2.1 percent and 1.2 percent, respectively. Shares of First Majestic Silver (NYSE:AG) edged 0.40 percent higher.
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Disclosure: Long EXK, AG, HL, PHYSRead the original article from Wall St. Cheat Sheet
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