Gold is regaining some of its safe-harbor appeal as a partial shutdown of the U.S. government carried over to a second day.
The price of the actively traded December contract for gold jumped $34.60, or 2.7 percent, to settle at $1,320.70 an ounce Wednesday.
Silver also rose sharply. The December contract rose 72.2 cents, or 3.4 percent, to $21.897 an ounce.
Financial markets were edgy as traders considered the prospect that political gridlock in Washington could lead to an extended, albeit partial, shutdown of the U.S. government. President Barack Obama summoned Congressional leaders to discuss the shutdown late Wednesday.
Traders are concerned the dispute could lead to a failure to raise the nation's borrowing limit, which is expected to be reached as early as Oct. 17. The last time the U.S. came close to doing that, in August 2011, it lost its triple-A credit rating from Standard & Poor's and financial markets were plunged into turmoil.
Jim Wyckoff, senior analyst with Kitco Metals, told clients in a note that the market was greeting the partial shutdown of the U.S. government with "mild anxiety but certainly not panic."
"If the situation drags on for several days, anxiety in the markets will increase," Wyckoff wrote. If the issue of raising the government's borrowing limit isn't resolved, he wrote, "it could be a much bigger event for the market place than the current budget impasse."
Other metals futures prices also rose.
December copper rose 4.2 cents, or 1.3 percent, to $3.316 a pound, January platinum rose $8.10, or 0.6 percent, to $1,393.40 an ounce and December palladium rose $2.30, or 0.3 percent, to $721.20 an ounce.
Energy prices rose, sending the price of crude oil to its biggest gain in two weeks.
Benchmark oil for November delivery rose $2.06, or 2 percent, to $104.10 a barrel on the New York Mercantile Exchange.
In other energy futures trading, wholesale gasoline rose 2 cents to $2.63 per gallon, natural gas dropped 7 cents to $3.54 per 1,000 cubic feet and heating oil rose 4 cents to $2.99 per gallon.
Crop prices mostly rose.
December wheat rose 4.75 cents to $6.86 a bushel and November soybeans rose 5.75 cents to $12.7375 a bushel. December corn was flat at $4.39 a bushel.