Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rallied 1.5% to close above $1,336 as concerns about a possible U.S. government shut-down increased safe-haven demand. House Republicans are threatening to let the government run out of money unless the Obama administration agrees to spending cuts. Financial markets are growing nervous that the shut-down, which would happen in October unless the debt ceiling is raised, may damage U.S. credit, increase borrowing costs, and send the U.S. and global economies into a tailspin. A similar impasse in 2011 helped gold to an all-time high above $1,921. The other precious metals also gained today, with silver up 1.4%, platinum 0.7%, and palladium 0.8%.

At the Comex close: December gold rallied $19.90 to $1,336.20; December silver picked up 30 cents to $21.89; January platinum gained $10.20 to $1,432.30; and December palladium added $5.70, to $725.70.

Central banks continue to buy gold bullion in order to diversify their currency reserves, according to IMF data. Turkey bought more than 23 tons in August and Russia added almost thirteen tons. Kazakhstan, Azerbaijan, the Kyrgyz Republic, and Ukraine also increased their gold reserves while Mexico and the Czech Republic were sellers.

Demand for physical gold continues to build in Asia. YLG Bullion International, the largest gold importer in Thailand, expects to double its gold buys to as much as 200 tons in 2013, according to Bloomberg. Thailand is Asia's third largest gold consumer, behind China and India. Thai gold demand rose 58% in the second quarter to 26 tons, according to the World Gold Council. Sales of coins, bars, and jewelry in China are projected to be more than 1,000 tons this year, overtaking India as the world's biggest gold-buying nation.