Gold Rebounds Above $1700 While Silver Climbs Above $32: GLD, SLV

On Monday, gold (NYSEARCA:GLD) futures for December delivery jumped $25.10 to settle at $1,710.80 per ounce, while silver (NYSEARCA:SLV) futures surged $1.15 to settle at $32.16.

France and Germany are expected to propose a fiscal union ahead of a December 9 summit that would set binding limits on euro-zone government borrowing, which many hope will open the way for the European Central Bank to bail out Italy and Spain.  German Finance Minister Wolfgang Schaeuble said his government was working closely with the French on the proposal. “We are working intensively for the creation of a stability union,” he said in a statement. ”That is what we want to secure through treaty changes, in which we propose that the budgets of member states must observe debt limits.” Germany and France are pushing for coercive powers to reject any budget that breaches EU rules.

Investor Insights: Are Physical Precious Metals Still in Demand?

Though the ECB has yet to show any signs of stepping up purchases of government bonds, a move the Organization for Economic Cooperation and Development said is necessary to restore confidence in the euro area, many are hoping France and Germany will now find a compromise on greater ECB intervention, which Germany has resisted in the past.

Precious metal (NYSEARCA:DBP) investments across the board climbed higher.  The SPDR Gold Trust (NYSEARCA:GLD) gained almost 2% in afternoon trading, while the iShares Silver Trust (NYSEARCA:SLV) jumped 3.75%.  Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Barrick Gold (NYSE:ABX) both climbed more than 4% higher.  Shares of Freeport-McMoRan Copper & Gold (NYSE:FCX) bounced 6.5% as copper prices rebounded with gold.  Silver miners (NYSEARCA:SIL) such as Silver Wheaton Corp. (NYSE:SLW) gained 4.5%, while First Majestic (NYSE:AG) bounced almost 6%.  Endeavour Silver (NYSE:EXK) surged 9% after falling below $10 per share last week.

Canadian billionaire, Eric Sprott, has been a strong investor and supporter of silver.  He is the CEO and Chairman of Sprott Management, a $10 billion investment firm.  In 2010, Sprott purchased $580 million in silver, which was accompanied by a huge gain in silver prices.  Now, Mr. Sprott is planning to purchase more physical silver.  According to Profitimes, Eric Sprott recently filed a prospectus for the purchase of $1.5 billion of silver bullion in order to cover expected demand for the company’s exchange traded fund, Sprott Physical Silver Trust (PSLV).  At a price of $35 per ounce, this would led to nearly 43 million ounces of physical silver being bought.  A staggering number that could easily send silver soaring in the coming months.

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