Updated from 11:45 a.m. EST with settlement prices
NEW YORK (TheStreet) -- Gold prices rose Monday as confidence increased that Congress would reach a U.S. budget deal to avoid deep spending cuts and tax relief measures that could automatically go into effect at the beginning of 2013.
Gold for December delivery jumped $19.70 to settle at $1,734.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,735.50 and as low as $1,713.40 an ounce, while the spot price was charging higher by $20.60, according to Kitco's gold index.
"Time to switch camps and -- for a change -- cheer the Capitol Hill talks' progress with buying some risk assets," Jon Nadler, senior analyst at Kitco Metals, wrote in a note.Silver prices for December delivery gained 82 cents to $33.19 an ounce, while the U.S. dollar index was shedding 0.38% to $80.88. Preliminary feedback on the so-called fiscal cliff talks suggested negotiations were "constructive" and on a promising path to reach a deal. "[B]oth the president and his team and congressional leaders from both parties felt that yesterday's meeting was very constructive," Jay Carney, White House press secretary, told reporters on Saturday. "And everyone expressed a desire to reach an agreement that reflected the shared goal of achieving a balanced approach to deficit reduction and an approach that enabled the economy to continue to grow and create jobs." Reporters pressed Carney for more details, but the press secretary stuck with the administration's message that President Barack Obama wanted to extend tax cuts for 98% of Americans. Gold investors may be wise to keep a close watch on budget discussions as Carney made clear that he could not speculate how exactly the balanced approach to deficit reduction would be achieved. In other words, the headlines suggest early negotiations struck a positive tone, but politicians have outlined few, if any, particulars to the deal. The president is currently on a diplomatic trip through Thailand, Myanmar and Cambodia, and members of Congress are expected to spend the next week back in their districts to gather constituents' sentiments on the budget deal.
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