Gold and Silver Start 2013 on High Note

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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.

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.

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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

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