Gold Prices Surge on Fresh Hope for Eurozone

Gold prices surged Monday as German and French leaders worked on an emergency plan to save the eurozone within weeks rather than months and strong U.S. retail buying bolstered equities.

Berlin and Paris are reportedly hammering out a fast-track scheme to force fiscal discipline among debt-choked eurozone members by deepening integration. The goal behind the frantic weekend talks is that such a move will clear the way for the European Central Bank to act quickly to keep Spain and Italy from joining Greece, Portugal and Ireland as nations on the verge of default.

In addition, eurozone finance ministers were set to meet Tuesday to approve terms for borrowing against the $586 billion European Financial Stability Facility and policies for granting credit to Eurozone members and buying those members' bonds.

Meanwhile, over the Thanksgiving weekend, U.S. consumers spent a record $52.4 billion, boosting merchants' sales by 16.4 percent from year-earlier levels.

The combined effect of the European and U.S. developments offset pessimism from a credit ratings cut of Belgium by S&P late last week and supercharged European equities, with Germany's DAX and France's CAC 40 up more than 3 percent.

U.S. stock futures for the Dow Jones Industrial Average, the Nasdaq 100 and the S&P 500 rose more than 2 percent, indicating a sharply higher opening.

The euro was higher, hovering between 1.33 and 1.34, while the dollar slumped nearly one percent to 79.05.

Crude oil gained 2.2 percent to $98.92.

December gold jumped $30.80 to $1,716.50, while gold for immediate delivery was up $6.23 to $1,712.18.

December silver surged $1.11 to $32.13, while silver for immediate delivery rose 37 cents to $32.13.