Gold and Silver Start 2013 on High Note

Wall St. Cheat Sheet

On Wednesday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, increased $13.00 to settle at $1,688.80 per ounce, while silver (NYSEARCA:SLV) futures for March jumped 78 cents higher to close at $31.00.

Both precious metals began the new year on a positive note, as Congress finally agreed to a fiscal cliff deal. Income tax rates will remain the same for individuals earning less than $400,000 a year, and households earning less than $450,000 a year. Taxes on capital gains and dividends will also have the same income thresholds.

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The payroll tax was left to expire and spending cuts were non-existent as the $109 billion in defense and domestic program spending was delayed for two months. Even though the deal is actually projected to increase the nation’s deficit by $4 trillion over the next 10 years, Wall Street was pleased with some clarity.

Gold finished 2012 with its twelfth consecutive annual gain and carried the momentum into this year, reaching fresh two-week highs. Meanwhile, silver was among the best performers in the market.

By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) closed 0.70 percent higher, while the iShares Silver Trust (NYSEARCA:SLV) jumped 1.9 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Agnico Eagle Mines (NYSE:AEM) both increased more than 1 percent. Silver miners such as First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) surged 4.8 percent and 5.6 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS