Silver surges 3.5%, gold nudges $1700

After getting clobbered yesterday, gold and silver rallied Tuesday on a stronger commodities market, along with bargain hunting at lower precious metals prices and short covering.

Spot silver gained 3.5% to $32.77 a troy ounce, while the December gold contract was up 1.3% to $1699/oz.

Other factors behind the precious metals surge, according to Kitco News, were reports of better physical demand for gold; the failure of a U.S. Congress “supercommittee” to agree on spending cuts; stabilization of the European debt crisis following a well-subcribed Italian bond auction; and market relief that key ratings agencies would not downgrade US debt.