Spot Gold closed up $13.90 an ounce in New York today , at $1,661.80. Spot silver was up $0.25 to $30.51. Both metals posted a better than .8% increase today. This rise came in the face of a stronger dollar, which usually dampens precious metals. That silver gained while equities and copper dropped suggests that today's positive silver action was due to safe haven buying instead of industrial demand. Jim Wyckoff at Kitco speculates that the bears in both gold and silver have worn themselves out in the near term, but it will be up to the bulls to step up and take advantage of the situation.
The continued thin volumes in the market indicate that most players are still on the sidelines, as the debt ceiling negotiations in Washington loom ahead. Some positive news for physical gold comes from Asia, as the Bank of Japan announced plans to double it''s gold reserves, now at 3.3%; and news that Chinese gold imports through Hong Kong doubled in November compared to October. Traders see today's spike in Chinese gold buying as the signal for the start of the Lunar New Year buying season ahead of celebrations in February.
In other news, Richmond Federal Reserve President Jeffrey Lacker reiterated his belief Monday that the Fed's quantitative easing is doing nothing concrete for the market and is only raising inflation dangers that we may see start next year. "I see an increased risk, given the course the committee has set, that inflation pressures emerge and are not thwarted in a timely way. I see material upside risks to inflation in 2014 and beyond, given the current trajectory for monetary policy," he said.