Gold Soars over $20 Higher On Bargain Hunting And Safe-Haven Demand

NEW YORK (Sept 3)   Gold prices ended the U.S. day session with good gains Tuesday, as bargain hunters stepped in to buy the early dip in prices. There was also safe-haven buying that surfaced during the day as it appears the U.S. Congress will support President Obama’s effort to use military force against Syria. December Comex gold was last up $18.30 at $1,414.40 an ounce. Spot gold was last quoted up $18.00 at $1415.00. December Comex silver last traded up $0.897 at $24.41 an ounce.

The gold market started to reverse modest early losses in late-morning dealings—about the same time that news reports said U.S. congressional leaders are falling in line with Obama and his notion that Syria needs to be punished with U.S. firepower for its alleged use of chemical weapons against its population. Russian news agencies reported overnight that two missiles were launched in the Mediterranean Sea, possibly a test from Israel. Those reports caused European stock markets to shudder and gold prices to briefly rally. If this situation escalates, stronger safe-haven demand for gold will likely surface.

U.S. traders came back to work from a long Labor Day weekend they now have a full plate of events that lie just ahead. The important U.S. jobs report is out on Friday. The Bank of England and European Central Bank hold their monthly monetary policy meetings on Thursday. There is a Group of 20 nations meeting this week. The U.S. congress returns from its summer recess in mid-September and will immediately have to deal with pressing budget matters. There is an FOMC meeting in September, at which time many believe the U.S. Fed will decided to change its monetary policy.  And, it’s likely that President Obama early this fall will name a new Federal Reserve chairman (Yellen or Summers).