Gold jumps Monday, closes year with gains

Gold and silver prices jumped in New York Monday after President Barack Obama said a settlement to avert the fiscal crisis was near. The budget impasse in Washington been the primary concern among brokers for the past two weeks. Some have dropped gold positions because it is used as a hedge against inflation and lack of a budget deal was predicted to push the U.S. economy into a recession, which would eliminate the need for inflation protection. Traders were also selling to make money. Gold closed the year up about 7 percent, despite a drop in the past month. On the New York Mercantile Exchange, gold for February delivery added $18.50 or 1.12 percent to $1,674.40 per troy ounce. Silver for March delivery gained 44 cents or 1.47 percent to $30.42 an ounce. The euro fell to $1.319 from Friday's $1.3217. The dollar rose to 86.74 yen from 85.97 yen.