On Friday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, jumped $14.20 to settle at $1,660.10 per ounce, while silver (NYSEARCA:SLV) futures for March bounced 53 cents to close at $30.20.
Both precious metals outperformed the broad equity market as fiscal cliff worries dominated headlines. Due to a lack of support among his own party, Republican House Speaker John Boehner canceled a vote on his own plan to dodge a tax increase for the majority of Americans. The bill, often referred to as “Plan B,” was the newest plot line in the fiscal cliff episode.
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It would have allowed the Bush-era tax cuts to expire on people with incomes above $1 million per year, while extending them for everyone else. After pulling the bill without a vote, Boehner then dismissed the House until after Christmas, raising doubt that the two political parties will be able to reach some kind of a deal before the beginning of January. All three major U.S. stock indices declined more than 1 percent on the news.
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) and iShares Silver Trust (NYSEARCA:SLV) both increased 0.35 percent. Yamana Gold (NYSE:AUY) jumped 1.75 percent, while Newmont Mining (NYSE:NEM) gained 0.95 percent. However, silver names such as Silver Wheaton (NYSE:SLW) and First Majestic Silver (NYSE:AG) dropped more than 1 percent.
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Disclosure: Long EXK, AG, HL, PHYS