On Monday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, increased $8.80 to settle at $1,669.40 per ounce, while silver (NYSEARCA:SLV) futures for March jumped 70 cents to close at $31.11.
Both precious metals climbed higher as political rhetoric on the debt ceiling kicked into high gear. In a White House new conference, President Barack Obama warned Congress that “markets could go haywire” if the debt ceiling is not raised. He also added, “Raising the debt ceiling does not authorize more spending. It just allows the country to pay the bills it’s already committed to.”
However, spending is likely to remain an issue in the coming weeks. House Speaker John Boehner issued a statement in response to the President’s comments. Boehner explains, “The American people do not support raising the debt ceiling without reducing government spending at the same time. The consequences of failing to increase the debt ceiling are real, but so too are the consequences of allowing our spending problem to go unresolved. Without meaningful action, the debt will continue to act as an anchor on our economy, costing American jobs and endangering our children’s future. The House will do its job and pass responsible legislation that controls spending, meets our nation’s obligations and keeps the government running, and we will insist that the Democratic majority in Washington do the same.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) increased 0.30 percent, while the iShares Silver Trust (NYSEARCA:SLV) gained 1.90 percent. Gold miners (NYSEARCA:GDX) such as Goldcorp (NYSE:GG) and Barrick Gold (NYSE:ABX) increased 0.95 percent and 0.40 percent, respectively. Meanwhile, Pan American Silver (NASDAQ:PAAS) and Hecla Mining (NYSE:HL) jumped 2.60 percent and 1.35 percent, respectively.
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Disclosure: Long EXK, AG, HL, PHYS