Gold, Silver Shares Climb, Dow Jumps 250 Points

Gold and silver shares began 2012 on a particularly positive note, as the Philadelphia Gold & Silver Index (XAU) climbed 4.0% to 187.77 in morning trading.  In doing so, the XAU – comprised of many of the world’s largest precious metals companies – posted its best day since November 30, 2011.

Among gold producers, Agnico-Eagles Mines (AEM) and Randgold Resources (GOLD) were two of the top performers. AEM rose by 4.1% to $37.79 per share and GOLD by 5.0% to $107.19 per share.

Notable advancers among silver companies included Silver Wheaton (SLW) and Silver Standard Resources (SSRI).  SLW climbed by 4.3% to $30.20 per share and SSRI by 5.4% to $14.56 per share.

Gold and silver shares were propelled higher by a combination of the metals themselves and the broader equity markets.  COMEX gold futures surged 2.6% to $1,607.30 per ounce and silver jumped 6.0% to $29.59 per ounce. Precious metals received a tailwind from weakness in the U.S. dollar, which fell 0.8% against a basket of the world’s other leading fiat currencies.

With regard to the broader markets, the Dow Jones Industrial Average (DJIA) climbed 250.12 points, or 2.0%, to 12,467.68 and the S&P 500 Index advanced 25.06 points, or 2.0%, to 1,282.66.  The rally coincided with a modest decline in investor risk aversion, as measured by a 3.2% drop in the CBOE Volatility Index (VIX) to 22.65.

Stocks were boosted by gains in European markets, as well as a better than expected report on U.S. manufacturing activity.  The ISM Index for December came in at 53.9, above the 53.4 consensus estimate among economists.